Will I risk being terminated from my job if I file for bankruptcy? 27 Answers as of January 21, 2013

I have been working with my job for awhile, but I am not making enough to pay off my debts. I want to file for bankruptcy, but I am worried that if my employer finds out that they will fire me. Is it illegal for them to terminate me based on the fact that I am filing for bankruptcy?

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Mercado & Hartung, PLLC
Mercado & Hartung, PLLC | Christopher J. Mercado
Your employment is probably at-will so they can terminate you for any reason unless you are part of a protected class and that is the reason why they are terminating you. Bankruptcy filers is not a protected class.
Answer Applies to: Washington
Replied: 8/10/2011
Lake Forest Bankruptcy
Lake Forest Bankruptcy | Anerio V. Altman, Esq.
In almost all cases it is illegal to fire someone for filing for Bankruptcy Protection. If that happens, you MUST see an attorney.
Answer Applies to: California
Replied: 8/9/2011
Law Office of Michael Johnson
Law Office of Michael Johnson | Michael Johnson
No. There is federal laws that prohibit those actions. However, in Florida it is an at will state which means an employer can hire or file for may other reasons. There are many times an employer will not even be notified of the Bankruptcy.
Answer Applies to: Florida
Replied: 8/9/2011
Melinda Murphy Dionne, PC
Melinda Murphy Dionne, PC | Melinda Murphy Dionne
The answer depends on the identity of your employer. Governmental employers may not discriminate against someone because they file bankruptcy. Private employers are not subject to this limitation. However, in 25 years of practice, I have never seen a client terminated because they filed a bankruptcy case.
Answer Applies to: Alabama
Replied: 8/9/2011
Diefer Law Group, P.C.
Diefer Law Group, P.C. | Abel Fernandez
It is usually illegal for an employer to fire you if you file for bankruptcy. However, there are few jobs that require for you to have secrete clearance or where you handle money such as with a transport company. In these few exceptions, termination can be legal.
Answer Applies to: California
Replied: 8/9/2011
    Financial Relief Law Center
    Financial Relief Law Center | Mark Alonso
    It is illegal for a government or private employer to fire you because you filed for bankruptcy. However, there may be other reasons that an employer may point to as grounds for termination, so you may want to consider that they could take this kind of approach and terminate you based upon something else if there are grounds.
    Answer Applies to: California
    Replied: 8/9/2011
    Rosenberg & Press
    Rosenberg & Press | Max L. Rosenberg
    Unless you are working for certain financial institutions and have an employment contract that is contingent upon your financial status, it is illegal and discriminatory to fire you. Even with a contract, it may still be interpreted to be illegal. Thanks for tuning in!
    Answer Applies to: Connecticut
    Replied: 8/9/2011
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    Pursuant to section 525 of the bankruptcy code it is illegal to discriminate in employment, public or private, based on filing bankruptcy.
    Answer Applies to: California
    Replied: 8/9/2011
    Eric J. Benzer, Attorney at Law
    Eric J. Benzer, Attorney at Law | Eric Benzer
    No
    Answer Applies to: Maryland
    Replied: 8/9/2011
    Benson Law Firm
    Benson Law Firm | David Benson
    It is indeed unlawful to fire someone solely because they have filed for bankruptcy protection. The problem often becomes whether it is arguable that a debtor could be fired for other reasons as well. The reality is that employers do get away with firing employees who file for bankruptcy.
    Answer Applies to: Ohio
    Replied: 8/9/2011
    Heupel Law
    Heupel Law | Kevin Heupel
    The bankruptcy code prevents an employer from terminating an employee on the sole grounds that the employee filed bankruptcy.
    Answer Applies to: Colorado
    Replied: 8/9/2011
    Colorado Legal Solutions
    Colorado Legal Solutions | Stephen Harkess
    Yes, it is illegal for an employer to terminate an employee solely because they filed for bankruptcy. That would be a violation of federal law.
    Answer Applies to: Colorado
    Replied: 8/9/2011
    Lehn Law, PA
    Lehn Law, PA | Joseph W. Lehn
    Generally, an employer cannot terminate you for filing bankruptcy. Certain employment positions which require a securities license and financial background checks could pose an employment problem as bankruptcy could negatively reflect on a credit check.
    Answer Applies to: Florida
    Replied: 8/9/2011
    R. Steven Chambers PLLC | R. Steven Chambers PLLC
    Yes, it is illegal to fire you for filing bankruptcy.
    Answer Applies to: Utah
    Replied: 1/21/2013
    Law Office of Maureen O' Malley
    Law Office of Maureen O' Malley | Maureen O'Malley
    If you have a security clearance you must tell them. If you file Ch. 13 you have to order a payroll deduction. Other than that, the employer usually doesn't know, and usually doesn't fire people for it.
    Answer Applies to: Virginia
    Replied: 8/8/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    It is unlikely an employer will learn about a 7. They will know about a 13. A firing based on bankruptcy violates federal law (although a refusal to hire IS legal).
    Answer Applies to: Georgia
    Replied: 8/8/2011
    Judith A. Runyon, Esq. Attorney at Law
    Judith A. Runyon, Esq. Attorney at Law | Judith A. Runyon
    It is illegal for an employer to fire you for filing bankruptcy, unless your job involves handling money or you have a high security clearance. Then, it might pose a problem.
    Answer Applies to: California
    Replied: 8/8/2011
    Indianapolis Bankruptcy Law Office of Eric C. Lewis
    Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis
    Unless you work in some type of government position that requires a security clearance, it is generally prohibited by federal law for an employer to fire someone because of filing for bankruptcy relief.
    Answer Applies to: Indiana
    Replied: 8/8/2011
    Edward Papa, Esq.
    Edward Papa, Esq. | Edward Papa
    Unless you are in a job with security clearance, it is highly unlikely you would lose your job. In fact, unless you owe them money and list them as a creditor, it is unlikely that they would find out about your bankruptcy. Bankruptcy is better than the alternative of having your creditors calling you at work and serving orders for garnishment on your boss - that will usually get you fired.
    Answer Applies to: New York
    Replied: 8/8/2011
    Ross Smith, Attorney at Law
    Ross Smith, Attorney at Law | Charles Ross Smith III
    Your employer probably will not notice your Chapter 7 Bankruptcy, unless it runs a credit check on you for some reason, like a promotion or a security clearance. In most cities, the newspapers do not publish bankruptcies. They could, but they choose not to. Call your local paper and ask. Then keep quiet and do not spread word about your bankruptcy. Usually, the only person who knows that you are in bankruptcy would be a creditor and your US Mail delivery person. Mail carriers know that their jobs depends on tight lips. They don't talk. You can always get a private mailbox. If a nosy neighbor wanted to know who has filed for bankruptcy, they would have to know to go on the internet and subscribe to PACER. This costs money (not much) and is very rarely done by civilians for recreational purposes. In a Chapter 13, the employer is not notified, unless you request it. You can ask your employer to deduct payments from your wages in a Chapter 13, If you choose.
    Answer Applies to: Ohio
    Replied: 8/8/2011
    Law Office of J. Thomas Black, P.C.
    Law Office of J. Thomas Black, P.C. | J. Thomas Black
    Yes, it is a violation of Sec. 525(b) of Title 11, United States Code (the Bankruptcy Code) for a private employer to terminate your employment, or discriminate in employment against you, solely by reason of you filing bankruptcy or not paying a debt that is dischargeable under the Bankruptcy Code. Please take notice of that word "solely." If you employer has another, legitimate reason to fire you, then you are history, and they would not be violating the law. This law (11 U.S.C. Sec. 525(b)) also does not apply to hiring decisions. Employers can legally discriminate against you in hiring if you filed bankruptcy, or if you have bad credit, for example. So you may not get that job in private industry, if you try to hire on with a firm that discriminates based on a prospective employee having filed bankruptcy, or having bad credit. The only employer that I have ever heard of having such an "across the board" policy, strangely enough, was a debt-counseling company. Governmental employers, on the other hand, are prohibited from discriminating against people that have filed bankruptcy, in employment and also in hiring, under 11 U.S.C. Sec. 525(a).
    Answer Applies to: Texas
    Replied: 8/8/2011
    Goldsmith & Guymon
    Goldsmith & Guymon | Marjorie Guymon
    It is illegal to discriminate against someone solely based upon the fact that they filed for bankruptcy. Since Nevada is a no fault state you can be terminated without cause. The question will arise when you seek unemployment whether you are entitled to unemployment - being fired with cause resulting in no unemployment/or fired without cause resulting in unemployment.
    Answer Applies to: Nevada
    Replied: 8/8/2011
    Bird & VanDyke, Inc.
    Bird & VanDyke, Inc. | David VanDyke
    Yes it generally illegal for your employer to fire you just because you filed bk. How would your employer even find out?
    Answer Applies to: California
    Replied: 8/8/2011
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    First, they are not likely to find out. Second, if they want to fire you they will find a way. That is a fact of life. Third, government employees are protected from discrimination based on filing for bankruptcy.
    Answer Applies to: California
    Replied: 8/8/2011
    Linda C. Garrett Law
    Linda C. Garrett Law | Linda Garrett
    You shouldn't be fired-unless filing for bankruptcy is a condition for your continued employment. For instance, certain types of professions expect you to manage your debts and not file for bankruptcy , e.g. bank employees, policemen, fireman and certain federal employers with certain levels of security clearance. For folks without employment conditions, bankruptcy is not only a federal legal right, but also written in the Constitution as a constitutional right! Something else to consider: if you are considering serving as a conservator of an estate, a guardian and/or trustee in the near future (or any type of position to which you have a "fiduciary duty" to a third party), then the Court could possibly deny your request to serve as a fiduciary. Also , I started by saying "shouldn't." Ignorant employers sometimes DO fire employees after having learned of the bankruptcy. So, keep that in mind. My philosophy is to file to file bankruptcy ONLY IF you have no other options. From experience, many people have other options.
    Answer Applies to: California
    Replied: 8/8/2011
    Law Offices of Joseph A. Mannis
    Law Offices of Joseph A. Mannis | Todd Mannis
    Unless you work in a job that requires a high level security clearance, you will not have any difficulty keeping your job.
    Answer Applies to: California
    Replied: 8/8/2011
    Kalra Law Firm
    Kalra Law Firm | Madhu Kalra
    If you file bankruptcy, you will not loose your job. Fact that you filed bankruptcy , has nothing to do with your employment, provided you qualify to file otherwise.
    Answer Applies to: California
    Replied: 8/8/2011
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