How Does Filing for Bankruptcy Affect Your Employment?

The decision to file bankruptcy is difficult. You may be embarrassed about your financial situation and unaccustomed to being unable to pay your bills. But when all other options fail, bankruptcy may be the only alternative left. One reason some are hesitant is from worrying about how filing for bankruptcy may affect employment.

Understandably, you want to know how filing bankruptcy could affect your job, given the last thing you need while in a financial crisis is to lose your income. The Ohio bankruptcy attorneys at Kademenos, Wisehart, Hines, Dolyk & Wright Co., LPA have worked with many clients just like you who were concerned about the intersection of bankruptcy and employment. We can explain your rights under the bankruptcy statutes, including those that affect your livelihood.

If you need to know more about filing for bankruptcy and what that means to your job, or have other questions, contact us today at (419) 625-7770 or online to schedule a free consultation with experienced bankruptcy attorney Adrienne M. Hines.

Can You Be Fired for Filing Bankruptcy?

One of your primary concerns is that your employer might fire you for filing bankruptcy. But, the good news is that no employer can terminate you based solely on filing for bankruptcy protection. Not only can you not be fired on the sole basis of bankruptcy, but your employer also cannot take adverse action against you, such as:

  • Salary reduction
  • Demotion
  • Transfer responsibilities

While protection from discrimination due to bankruptcy exists, understand that if your employer has other reasons to fire you, being in bankruptcy won’t act as a shield from that action. Only if you file for bankruptcy, and shortly after that, you’re canned, will you possibly have a case for discrimination related to bankruptcy.

Keep in mind that if you keep your personal financial affairs private, your employer may not know about your bankruptcy filing. You have no duty to alert your employer to your filing. A few ways your employer might receive notice of your bankruptcy, however, include:

  • Garnishments: If you have wage garnishments, your employer will receive a notice to stop garnishment after a bankruptcy filing.
  • Plan Payments: Under Chapter 13, you make monthly payments to pay some of your debts. The court could order the payment withheld from your wages, so your employer will know about the bankruptcy.
  • Employer as a Creditor: Notice of your bankruptcy will go to your employer if you owe money on workplace loans.

If you are unsure as to whether to disclose your bankruptcy to your employer, make an appointment with our debtor’s rights attorneys to discuss.

Bankruptcy and Job Hunting

Under federal law, no public employer may refuse to hire an applicant due to bankruptcy. But private employers can refuse to hire you because of bankruptcy if credit history is a relevant job-related criterion. For example, if the job requires handling money or bookkeeping, a private employer can require a clean credit check as a condition of employment.

It’s important to remember that you have rights under the Fair Credit Reporting Act (FCRA). You must provide written consent for an employer to check your credit report. If the results provide the basis for denial of employment, per FCRA requirements, you must receive notice of adverse action, a copy of the report, and how to challenge it.

If you know a credit check will be part of the process to secure a new job, be transparent about your previous financial issues. Explain the situation, how you resolved it, and that you have your financial house in order now. Most employers understand that life happens, and bankruptcy isn’t a badge of shame.

Thinking About Filing Bankruptcy? Let Us Help

Studies show that financial problems are among the most stressful we face. Money issues are among the top causes of divorce, for example. Dealing with financial hardship, debt collection, and failing to make ends meet could undermine you on the job as well.

While you can’t be fired solely for filing bankruptcy, you want to make sure money stress doesn’t harm your job performance. Let Kademenos, Wisehart, Hines, Dolyk & Wright Co., LPA help you understand how bankruptcy is an option for a fresh start.

Our experienced, compassionate bankruptcy attorneys are here to help you through these economic hard times. Contact us today for a free consultation. Call (419) 625-7770 or use our online form to schedule a free consultation with bankruptcy attorney Adrienne M. Hines.