Can I Lose My Job Because I Filed Bankruptcy?

Section 525 of the bankruptcy code protects those persons who have filed bankruptcy. This section of the bankruptcy code specifically bars either a public or private lawyer from terminating an appointment or discriminating against an employee who is filed bankruptcy.

This section of the bankruptcy code contains many other important protections for individuals who have filed bankruptcy. For example a governmental agency may not deny revoke suspender refused to renew a license or permit charter or franchises or discriminate against an individual who has filed bankruptcy. In other words you cannot lose your driver’s license because you filed bankruptcy, nor can you lose a professional license simply because you have filed bankruptcy. This section also contains a broker prohibition against any lender refusing to provide a student loan, or student aid, on account of an individual having filed bankruptcy.

Filing of any action in a court is a public record, and is typically available for public inspection. Such facts when a bankruptcy was filed, the type of bankruptcy, and the case number are generally easily accessible to the public. Specific information that was contained in your bankruptcy filing however is much more difficult to obtain. Therefore, unless the individual researching your background is an attorney with access to the court electronic filing system, or unless they have gone to the Spence of obtaining a complete copy of your bankruptcy file, the specific financial information contained in your bankruptcy papers will likely never be public knowledge.

Potentially, it is possible that a future employer could discriminate against the hiring of an individual who is filed bankruptcy. However, one needs to weigh the likelihood of this happening against the likelihood that continuing to have unpaid debts and bad credit would also cause a potential future employer to discriminate against them in the hiring process. In my experience, one should never let fear of potential job discrimination prevent them from obtaining needed relief from their debts.

At Marshall D Cohen Company LLC we have had experience counseling clients on this matter and with regard to such important issues as the effect of bankruptcy on government security clearances and other employment matters. If you have a question about the potential to be discriminated against because you have found bankruptcy please feel free to call us for a confidential consultation.