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Employment Termination and Bankruptcy

When it rains, it often pours. Being in financial trouble is one thing to have on your plate, but to fear for your employment status due to those troubles is another thing entirely. Our office is often asked if employment status can be in jeopardy due to bankruptcy. There are laws that protect employees around this issue, but there are also some limitations to those laws. Read on to find out more about employment termination and bankruptcy.

It is natural to wonder how bankruptcy will impact your life, including your employment status. Some of the more common questions our clients ponder over are: “Can I be passed over for a job due to bankruptcy?” Or “Can I be fired for filing a bankruptcy petition?”

In general, employers will not find out that you have filed for bankruptcy unless there is wage garnishment, payroll deduction for a Chapter 13 repayment plan, or through a credit report. If they do become aware of your bankruptcy filing, rest assured that an employer, either government or private corporation, cannot fire you solely because you filed for bankruptcy. Nor can an employer use a bankruptcy filing as a reason to change other terms or conditions of your employment.

In addition, no federal, state, or local government agency can consider your bankruptcy when deciding whether to hire you. Private employers, however, aren’t constrained by a similar rule, and some people find that having a bankruptcy in their past may come back to haunt them. This could be especially true if you are applying for a job in areas that require handling finances or accounting.

If you fear that a potential employer may discover your bankruptcy when conducting a credit background check (often common when applying for a job in the private sector), you may want to come clean and explain the bankruptcy. Facing the issue head-on not only shows you are forthright and honest but that you are making financial changes in your life as well

Do you have questions about your bankruptcy case and how it may impact your employment status? Talk to our team about what bankruptcy would mean for you. Call the Law Office of Barry R. Levine today by phone at 978-922-8440, or visit our website at