Losing Your Job If You File Bankruptcy
In most cases, bankruptcy has no effect on current or future employment.
Many consumers new to the
bankruptcy filing process may worry about suffering potential consequences if they decide to file.
This is a common question asked about at the beginning of the filing process.
For the most part, the bankruptcy code includes a special section that
prohibits consumers from being discriminated if they file bankruptcy.
There are limited exceptions to the rule.
Certain employees, such as those with a governmental agency or private
organization, may be protected from bankruptcy discrimination. If you
are currently employed you cannot be terminated or discriminated against
because you filed recently or in the past. The law even protects family
members and the spouse of someone who has filed for bankruptcy protection.
There are other areas this code offers protection against. Government and
private agencies that offer grants and student loans cannot deny your
approval or discriminate against you because you filed bankruptcy. Keep
in mind, some private organizations that need to run a credit and/or background
check may learn about your financial history. If you fail to give consent
when the potential employer asks to review your background if applying
for employment, you could be denied the job. An employer should get permission
from you before obtaining such details.
Employers may learn about a bankruptcy filing if you make payments to your
Chapter 13 trustee through payroll withdraw. Information about your filing is strictly
confidential to your employer unless legal means are necessary. If you
have questions or concerns about this issue discuss them with a bankruptcy attorney.