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How Will Bankruptcy Affect My Job?

bankruptcy-attorney-nycWhen filing bankruptcy many people wonder – how bankruptcy will affect my job? The short answer to this is that in most cases bankruptcy will not affect your current job and in many cases your current employer won’t even be aware of your situation.

Will I Lose My Job for Filing Bankruptcy?

Under 11 U.S.C. 525, it is illegal for an employer to fire you because you filed for bankruptcy. Whether a government or private business, employers cannot fire an employee for filing bankruptcy. Employers also cannot discriminate against an employee for filing bankruptcy as well. This includes demoting, reducing salary, and/or eliminating responsibilities of an employee. Please keep in mind, however, the bankruptcy code will not protect you if there are valid reasons that warrant being fired or demoted. Some valid reasons include: tardiness, absence, dishonesty, stealing, incompetence, inappropriate behavior.  Other reasons may apply depending upon the state the debtor lives in and what type of employment the debtor has.

Will My Employer Find Out About My Bankruptcy?

Typically, employers do not find out about a bankruptcy filed by one of their employees. However, if a creditor filed a lawsuit against you, obtained a judgment, and is prosecuting that judgment by garnishing your wages at the time of filing – your employer will be notified. As stated above, a bankruptcy filing should not affect your status at your job. The reason an employer would be contacted is to ensure that the garnishment is stopped. Also, your employer should not share information concerning your bankruptcy with any non-essential co-workers. They should keep your personal matters private.

In some states, if you file a Chapter 13 bankruptcy, employers are more likely to be notified of an employee’s bankruptcy filing. This is because a bankruptcy judge may order the chapter 13 bankruptcy payments to be automatically deducted from a debtor’s wages and sent to the bankruptcy court. Please note, the Bankruptcy Courts in New York do not issue these types of orders.

How Will Bankruptcy Affect Me When I Apply For A Job?

Many people feel that bankruptcy will affect their prospects of obtaining a job in the future however this is not necessarily true. No federal, state or local government agency may take your bankruptcy into consideration when deciding to hire you. In contrast, private employers do not have rules against hiring someone who filed a bankruptcy. Employers that are financially focused firms may take money troubles into account since there is their area of expertise.

Private employers can conduct a credit check as a requirement for a job and find out about an applicant’s bankruptcy on their credit report. It is typically best to be honest and upfront about your situation. Showing that you were able to assess your financial situation and determine that filing for bankruptcy would allow you to start fresh may make you a better applicant in some circumstances.

How Can The Law Offices of David I. Pankin P.C. Help

To learn more about how to put your financial troubles behind you and get a fresh financial start, contact the Law Offices of David I. Pankin at 888-529-9600. David I. Pankin is a New York Bankruptcy attorney that has been helping consumers for over 20 years. We service the 5 boroughs, Long Island and Westchester with offices conveniently located in Brooklyn, Manhattan and Long Island. Call for you FREE consultation. We are looking forward to hearing from you!