Does Filing for Bankruptcy Affect Employment?

 Posted on March 26, 2020 in Bankruptcy

There are many situations in which a person might resort to filing for bankruptcy. Maybe they or a family member was severely ill and they have tons of medical bills that they cannot afford to pay. Maybe they lost their job and are now getting behind on payments for their bills. Whatever the reason, bankruptcy is usually entered into by individuals who no longer can keep up with their monthly bills because their income is greatly surpassed by their debts. Filing for bankruptcy is often a person’s last chance at trying to reconcile their finances. Most people understand that a bankruptcy affects many areas of their life. What they might not realize, however, is how their bankruptcy could affect their professional life and career.

Can I Lose My Job if I File for Bankruptcy?

The simple answer to this question is no, your employer cannot fire you solely for filing for bankruptcy. According to the United States’ Bankruptcy Code, neither governmental or private employers are permitted to, “terminate the employment of or discriminate...against an individual who has been a debtor or bankrupt under the Bankruptcy Act.”

This means that you cannot be fired, reprimanded, denied a bonus, demoted or otherwise disciplined just because you filed a bankruptcy case. However, if you do happen to experience any of these things after you file for bankruptcy, it can sometimes be difficult to prove that the reason your employer did these things was solely because of the bankruptcy.

Can an Employer Discriminate Against Me Because of My Bankruptcy?

This is where it can become a little tricky. The Bankruptcy Code states that governmental and private employers are both prohibited from discrimination against individuals who file for bankruptcy, but it does not address hiring practices for both types of entities. Government agencies are prohibited from doing nearly anything in relation to an employee who files for bankruptcy, but the same standards are not applied to private employers.

The Bankruptcy Act states that government agencies cannot, “deny employment to…a person who is or who has been a debtor or bankrupt…” When it comes to private employers, the term “deny employment to” has not been included. This means a private employer is not prohibited from denying employment to an individual on the basis that they have filed for bankruptcy.

Are You Worried About How Your Bankruptcy Could Affect Your Career? Contact a New Braunfels, TX Bankruptcy Lawyer Today

One of the biggest financial decisions you may have to make in your lifetime is whether or not you file for bankruptcy. While this could be the best decision for you financially, you may face repercussions, such as issues with your employer. If you are concerned about how your bankruptcy could affect your career, you should speak with a knowledgeable Boerne, TX bankruptcy attorney as soon as possible. At the Law Offices of Chance M. McGhee, we understand how important it is that you protect your finances and your career. Call our office today at 210-342-3400 to schedule a free consultation.

Sources:

https://www.thebalance.com/how-will-bankruptcy-affect-your-job-4151846

https://www.thebalance.com/will-filing-bankruptcy-affect-your-job-4140677