Will I risk being terminated from my job if I file for bankruptcy? 27 Answers as of August 10, 2011

The bankruptcy code prevents an employer from terminating an employee on the sole grounds that the employee filed bankruptcy.

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.

Yes, it is illegal to fire you for filing bankruptcy.

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.

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).

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.

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.

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.

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 In most cities, the newspapers do not publish bankruptcies.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.

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.

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).

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.

Yes it generally illegal for your employer to fire you just because you filed bk. How would your employer even find out?

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.

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.

Unless you work in a job that requires a high level security clearance, you will not have any difficulty keeping your job.

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.