Can I Get Fired From My Job For Filing Bankruptcy?

Sep 06, 2010 1 Comment by


The short answer is, no.  Federal law prohibits an employer to discriminate against you for your declaring bankruptcy.  According to 11 U.S.C § 525 (a) and (b), no governmental unit or private employer may “…terminate the employment of, or discriminate with the respect of employment someone who is or has been a debtor under this title…” In other words, you can’t be fired from your job simply because you have filed for bankruptcy.

Can I Get Fired From Job for Filing Bankruptcy?

In most cases, your employer will never even know that you filed for Chapter 7 bankruptcy or Chapter 13 bankruptcy unless you tell them.  Also, as you are aware, bankruptcy has nothing to do with how well you can perform your job duties.  Once you are hired, they must have a different, legitimate reason to let you go (such as being late, not showing up at all, or not properly performing your job duties).

Although the law states that employers cannot use your credit against you; simply put, they sometimes do.  You may not be able to be fired from a job because you filed bankruptcy, but it could possibly prevent you from being hired for a job (or in some cases a promotion).  Normally, this only applies to your employment with private companies that deal with handling money like banks and other financial institutions. Federal, state, and government agencies cannot refuse employment due to bankruptcy.

Many companies have begun completing background checks, which include checking someone’s credit score. As unfortunate as it is, potential employers may use this to gauge your responsibility.  Do you pay your bills on time?  Are you over extended?  Someone with a high debt to income ratio could potentially be looked at as someone who might be more likely to steal from a company.  Is this fair?  No, not necessarily but it is more common than you think.  Many states are in the process of trying to ban credit checks used to determine employment, in an effort to protect citizens’ civil rights.

Bankruptcy, Bankruptcy Video Vault, Chapter 13, Chapter 7, Duncan Law Blog, Video
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At Duncan Law, LLP our goal is pretty simple. We try to make people's lives better. And in doing so we try to treat people the way we would want to be treated. It's just that simple.

We practice primarily in the areas of bankruptcy and workers' compensation. We have offices in Charlotte, Greensboro and Winston-Salem, NC.

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