When considering filing for bankruptcy, it’s natural to wonder how it could potentially affect your employment status over time. For legal advice, it’s best to go directly to the source, a Chapter 13 attorney who knows The United States bankruptcy code. For the most part, your current employment status will not be affected by your filing for bankruptcy. However, there are a number of important details you need to know about how to file bankruptcy Chapter 7 or Chapter 13 and its relation to your employment in the present and future years.
Will I Lose My Job Due to Bankruptcy?
Your employer does not have the authority to fire you solely because you filed for bankruptcy. They also are not able to use their knowledge of your filing to change the terms of your employment. This means that reducing your income, demoting you, or discriminating against you in any way is illegal.
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How Could My Employer Find Out About My Bankruptcy Filing?
Although it’s uncommon, your employer may still find out about your bankruptcy filing. According to a Chapter 13 attorney, this may happen if:
- There’s a stop to your wage garnishment for child support, mortgage payments, etc.
Your employer will find out if you file for bankruptcy and are subject to wage garnishment. If you stop your garnishment, your employer must receive notice of your filing.
- You’re making Chapter 13 payments
In some jurisdictions, filing for Chapter 13 bankruptcy will alert your employer; a bankruptcy judge may order your Chapter 13 payments to be deducted from your wages and sent to the bankruptcy court. Your employer would act as a collection agency, ensuring that you’re honoring your repayment plan.
- You owe your employer money
When you’re filing for bankruptcy, you’re required to list all of your debts. If this includes a debt owed to your employer, you must include the outstanding balance on your form. Your employer will then be notified that you are filing in an effort to pay them back.
Can an Employer Refuse to Hire Me?
When it comes to finding new employment, filing for bankruptcy can complicate things. Any federal, state, or local government position you apply for cannot consider your bankruptcy when deciding whether or not to hire you. However, a private employer doesn’t have to follow the same rules. They may choose not to hire a debtor due to filing or debt management issues.
Private employers are known to conduct a credit check on their applicants, and the credit report will make them aware of your bankruptcy filing. For employees seeking careers in finance, accounting, payroll, or other money-related fields, a bankruptcy filing could prove to be a major deterrent for employers.
Discuss Filing Bankruptcy with a Trusted Chapter 13 Attorney
Would you like to discuss whether bankruptcy is appropriate for your financial situation and how it could affect your employment status? For more information and any other support in your bankruptcy case, contact the law firm of Charles Clapp. You can also call 404.585.0040 to schedule a free consultation with a bankruptcy law Chapter 13 attorney to discuss debt relief.