Most people who are struggling financially don’t have to worry about the impacts of a bankruptcy on their employment. Most people are able to get a bankruptcy discharge and start their lives over. A bankruptcy, may however, have an impact on a person’s employment if they are applying for a job in the private sector. Keep in mind, this won’t affect the majority of people.
Individuals considering filing bankruptcy to get out of a financial rut, may have questions about whether their employer will find out about their bankruptcy filing? Whether an employer can fire them because of their history of bankruptcy? and Whether an employer can decide not to hire them because of their history of bankruptcy?
Individual’s should understand that filing bankruptcy is a public record. Thus, employers may learn about an individua’s bankruptcy filing if they do some deep digging. For most people, however, a bankruptcy filing won’t have any impact on an individual’s current employment. Below, will discuss the impacts of a bankruptcy on a person’s current and future employment.
Can I Be Fired Due to Bankruptcy?
The first rule of thumb is that no employer can fire an individual because they filed for bankruptcy. Both government and private employers can’t discriminate against individuals solely because they chose to file bankruptcy. This is particularly good news for people who are in the work force and struggling to pay their debt.
Further, protections provide that an employer can’t use an individual’s bankruptcy filing to change the terms of their employment. Individuals who are scared about being demoted or having their responsibilities revoked don’t have to worry. Employers are not allowed to change any of these conditions because an individual has filed bankruptcy.
People who feel they have been wrongly let go of their employment solely because of their bankruptcy filing should speak with an employment lawyer. Firing someone because the person has a history of bankruptcy can bring big repercussions and individuals who find themselves in this situation may be able to bring a claim of action against their employer.
Keep in mind, however, bankruptcy does not stop an employer from being able to let go of an individual for other valid reasons. Filing bankruptcy does not stop an employer from firing someone all together. An employer can fir someone if the individual strolls into work late every day or doesn’t perform their basic job duties that both parties agreed upon at the onset of the bankruptcy filing.
Will My Employer Find Out About My Bankruptcy Filing?
Generally, employers won’t be aware about an employees history of bankruptcy. However, there are circumstances where an employer will find out about an employee’s history of bankruptcy:
Stopping a wage garnishment – Individuals facing a wage garnishment from their creditors will likely need to tell their employer about their bankruptcy filing. As son as an individual files bankruptcy a wage garnishment will stop. However, to stop the wage garnishment the employer has to be notified of the bankruptcy filing. Individuals who are embarrassed about their bankruptcy filing, and don’t want their employers to find out about it shouldn’t be embarrassed. Most of the time when individuals have a wage garnishment the employer already knows about it. When a creditor seeks a wage garnishment they send letters to the individual’s employer so they can deduct the money owed directly from the individual’s paycheck. Many employers, will view a bankruptcy filing as a step in the right direction that the individual is taking control of their financial situation.
Owing an employer money – Individuals who file bankruptcy will have their bankruptcy attorney complete a bankruptcy petition for them. The bankruptcy attorney will ask for a list of names of the individuals creditors’ names and addresses so they can be notified of the bankruptcy filing. If an individual has an outstanding debt with their employer, the employer will need to be listed on the petition to be notified of the bankruptcy filing.
Telling an employer – Some individuals may elect to tell their employer about their bankruptcy. Some employees and employers have a close relationship where they feel comfortable to do so. Individuals are not under any legal obligation to notify their employer about their bankruptcy filing but can disclose such to their employers if they feel comfortable.
Bankruptcy Impact on Future Employment
Public sector employers are not allowed to consider an individual’s bankruptcy filing when deciding whether to hire someone for a position. However, private employers are not limited to the same rules. Private employers can consider a person’s bankruptcy filing when deciding whether to hire the person for a certain position. Private employers however, are not allowed to discriminate based on an individual’s bankruptcy filing.
Private employers may find out about an individual’s bankruptcy filing if they run a credit check on an individual as part of the hiring process. A bankruptcy filing stays on a credit report for 7-10 years depending on which chapter an individual files. Most people who file bankruptcy work in the private sector and most employers won’t reject someone who filed bankruptcy. Most employers are understanding of the fact that unforeseeable things can happen in life but are willing to overlook the bankruptcy and see that the individual has overcome their financial struggles.
Conclusion
Individuals who want to get out of debt but are worried about their future employment, shouldn’t be. Bankruptcy doesn’t impact very many people at all when it comes to getting a job. Most individuals who file bankruptcy have no debt and are more likely to be accepted for a position over someone who has debt and can’t pay their bills. It is very rare that an individual wouldn’t be hired for a position because of their bankruptcy. Moreover, employers can never fire an individual because of their history of bankruptcy. Individuals who are considering bankruptcy and struggling to pay their debts should not avoid filing bankruptcy because they are worried about their future employment.
If you are considering filing bankruptcy in New Jersey or New York contact Karra L. Kingston Esq. Karra L. Kingston Esq. has helped many people get out of debt and start over. Karra helps people all around New Jersey and New York file bankruptcy and get out of debt.