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Can I Lose My Job if I File Bankruptcy?

Posted By Allmand Law Firm, PLLC || 2-Oct-2013

pinkslip-1 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.


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