The Potential Impact of Bankruptcy on Your Employment

Can You Lose Your Job If You File? Will It Disqualify You from Future Employment?

The Potential Impact of a Bankruptcy Filing on Your EmploymentFor many people facing unmanageable debt, there’s a fear of filing for bankruptcy protection. That fear is based on concerns of job loss and negative impact on future employment opportunities. Can an employer terminate you for seeking protection under the bankruptcy laws? Do you have to disclose a prior bankruptcy to a potential employer? And can that employer disqualify you because you filed for bankruptcy?

Your Current Employment

Bankruptcy law is very clear that an employer may not engage in any type of retaliatory conduct upon learning that an employee has filed a bankruptcy petition. You can’t be fired, demoted, reassigned, denied benefits or otherwise incur any negative consequences at work as a result of filing for bankruptcy. It doesn’t matter if you’re the CEO of the company, a trust officer in a bank, or even in a position that requires security clearance. In fact, workers in sensitive positions usually are considered to be at greater risk of blackmail when financial problems are kept a secret.

However, the rules of the bankruptcy code apply only to actions taken after a bankruptcy petition is filed. You cannot use a bankruptcy petition to suspend or prevent a termination or other change in employment status if you were notified of the change before you filed for bankruptcy.

In addition, because employment is “at will” in most states, your employer can terminate the employment relationship at any time for any reason, provided it’s not contrary to a written agreement or in violation of law or public policy. Accordingly, an employer may cite reasons for your termination other than bankruptcy, and it may be difficult to prove those other reasons are a pretext.

Future Employment

Private employers may ask job applicants whether they have ever filed for bankruptcy. They have the right to eliminate candidates from consideration because of a bankruptcy filing. However, most state, local and federal government entities cannot discriminate against you because of a bankruptcy filing.

Contact Rockwall, TX Bankruptcy Attorney Carrie Weir

I offer a free initial consultation to all potential bankruptcy clients. Contact my office by e-mail or call me at 972-772-3083 for a private meeting. With offices in Rockwall, Texas, I represent clients in Heath, Greenville, Lavon, Wylie, Mesquite and Rowlett.

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Call Rockwall bankruptcy lawyer Carrie Weir at 972-772-3083 or fill out the contact from below for a free, confidential consultation to discuss your options.

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