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Can I Be Discriminated Against For Filing Bankruptcy In The Employment Context?

Published November 9, 2023 by Sasser Law Firm
Can I Be Discriminated Against For Filing Bankruptcy In The Employment Context?

Filing for bankruptcy can be a relief for those facing financial stress. However, many fear doing so will have negative reputational or professional repercussions. Some worry that an employer or potential employer will discriminate against them if they file. Understanding your rights regarding bankruptcy-related discrimination can help you feel more confident about your job and employment prospects as you take charge of your financial future.

Will My Employer Know If I File for Bankruptcy?

Typically, an employer will not have any reason to know that an employee filed for bankruptcy unless by chance funds are owed to the employer by the employee. Although all bankruptcy filings are considered public records, most employers will not bother to obtain this information. If a Chapter 13 case is filed and the debtor opts to pay through a payroll deduction order then the employer would be made aware of the bankruptcy. Payroll deduction is not required in chapter 13.

Can My Employer Discriminate Against Me for Filing for Bankruptcy?

If you wonder, “Can I get fired for filing bankruptcy,” the answer is no. Section 525 of the United States Bankruptcy Code bars any employer from discriminating against workers who have filed for bankruptcy. This rule applies to both private and public employers.

Furthermore, federal entities are prohibited from discriminating against prospective employees based on having filed for bankruptcy in the past. While private employers have a right to deny jobs to candidates who have filed for bankruptcy, this does not appear to be common.

What Can I Do If I Get Fired for Filing for Bankruptcy?

If you lose your job and believe it was directly related to your bankruptcy filing, you may have options:

  • File a charge of discrimination with the U.S. Equal Employment Opportunity Commission (EEOC) or your state’s fair employment agency.
  • Hire an attorney to assist you in building a case, negotiating with your past employer, and filing a lawsuit on your behalf, if necessary.
  • Consider claiming wrongful termination if your termination violates public policy or breaches an employment contract. 

Questions About Bankruptcy? Sasser Law Firm Can Help

At Sasser Law Firm, we understand that there are many facets to consider with a bankruptcy filing. For over 20 years, our board-certified bankruptcy specialist attorneys have helped North Carolinians find their way back to financial health. Contact us today for a free consultation

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