People considering bankruptcy naturally worry how it will affect their current employment or job search. The answer is that there are laws protecting current employees from discrimination because of bankruptcy — but employers sometimes ignore them.
It is easier to legally discriminate against you when you are applying for a job than after you are hired — so long as the bankruptcy is not the sole reason for not hiring you.
You may worry less if you consider the positive aspects of hiring or retaining a worker who has declared bankruptcy. A bankrupt employee is a better risk than one who is still saddled with unpayable debt — the employer doesn’t have the hassle of garnishing wages from a bankrupt worker. Those debts have already been discharged.
Bankruptcy Discrimination Questions
These are three of the most commonly asked questions about employment and bankruptcy.
1. Will your employer find out about your bankruptcy, decide you are not the kind of employee it wants, and terminate you?
No. The Bankruptcy Code forbids employers from discriminating against employees solely on the basis of debt. An exception would be if you signed an agreement when you were hired to maintain an immaculate credit rating — in which case declaring Chapter 7 or Chapter 13 could be seen as a violation of your agreement.
2. Will a prospective employer, conducting a background check on you, discover the filing and cross you off its list?
Yes. Employers are on the lookout for a reason not to invest in you, and a rocky credit history may suggest to them you are not good with money, or that you might steal if you are hired. This is unfortunate. While prospective employers may factor your bankruptcy into their decision, it may not be the sole reason for rejecting you.
3. What if I don’t tell them about my filing?
It’s important to tell prospective employers the truth. If you are found out later, the omission can result in termination. Your employer will be on solid ground not because of the bankruptcy itself, but because you misled them.
Bankruptcy Planning Attorney Serving Westland And Metro Detroit
For more information about bankruptcy and discrimination, contact attorneys Firebaugh & Andrews at 734-722-2999 for your free consultation