It is very rare for employers to find out about your bankruptcy status. In fact, you are not legally required to inform your employer of your Chapter 7 or Chapter 13 bankruptcy.
Although filing for bankruptcy can be seen as a fresh start for your finances, it can also come with some costs. Many people worry what the consequences will be after filing for Chapter 7 or Chapter 13 bankruptcy. Questions arise such as: “Will my employer find out about my bankruptcy?”, “Can my employer fire me because I filed for bankruptcy?” or “Is there a chance that bankruptcy will affect my future employment?”
Rest assured knowing that you can not be fired solely due to the fact that you filed for bankruptcy. However, in some situations, it could possibly prevent you from getting a job within a private industry in the future.
DISCLAIMER: The following blog post is just advice, and you will be better served to call David S. Clark with your bankruptcy questions. This blog contains helpful tips and advice, but is not professional legal advice, and shouldn’t treated as such.
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Can I Lose My Job Due to Bankruptcy?
An employer can not legally fire you because of your bankruptcy. Even more, an employer can’t change the terms and conditions of your employment based on your bankruptcy filing.
For example, your employer is not allowed to:
- Reduce your salary
- Downgrade your position
- Take away your specific responsibilities, or
- Terminate your employment
If for some reason you are fired shortly after filing for bankruptcy and there are no other justifications for your dismissal, you may have a case against your employer for illegal bankruptcy discrimination. However, keep in mind that bankruptcy can’t protect you from other misconduct, such as tardiness, inability to get the job done and dishonesty.
Could Bankruptcy Affect My Future Employment?
When applying for jobs, no federal, state or local government agency can take your bankruptcy into consideration when deciding whether to hire you. On the other hand, private employers have the power to do so.
The only time this really causes problems against someone who has filed for bankruptcy is for certain jobs that deal with money. For example, if you are applying for a job such as accounting or bookkeeping, employers tend to be more cautious.
Will My Employer Find Out About My Filed Bankruptcy?
It is very rare for employers to find out about your bankruptcy status. In fact, you are not legally required to inform your employer of your Chapter 7 or Chapter 13 bankruptcy.
Although it is very unlikely, these are the most likely ways that an employer could find out:
- Wage garnishments. If your wages were being garnished previously, your employer will be notified to stop the wage garnishments due to your debt being discharged.
- Chapter 13 payments. This is very uncommon, but if you have filed for Chapter 13 bankruptcy, a few jurisdictions require your debt reorganization payments to be deducted from your paycheck, which would make your employer aware.
- Owing your employer money. If for instance, you have to pay back a wage overpayment, you will have to list that as one of your debts in your bankruptcy paperwork, and your employer will be notified of that.
David S. Clark – An Experienced Bankruptcy Attorney Here to Help You!
If you have worries about the consequences of Chapter 7 or Chapter 13 bankruptcy affecting your employment status, contact David S. Clark today!
DISCLAIMER: The above blog post is just advice, and you will be better served to call David S. Clark with your bankruptcy questions. This blog contains helpful tips and advice, but is not professional legal advice, and shouldn’t treated as such.
