In short, you cannot be legally fired for filing for bankruptcy. Under the law, employers in both the public and private sector are prohibited from terminating employees due to their bankruptcy filing. However, private employers may refuse to hire an applicant undergoing bankruptcy.
You Should Not Fear an Employer Firing You Due to a Bankruptcy Filing
For now you should think about your fears – why are you afraid your employer would fire you if they found out about your bankruptcy filing? Bankruptcies are legal and not uncommon, and normally are not necessarily a reflection on your character as a person.
In addition, you need to consider how your boss would even find out you filed for bankruptcy. Most employers will not be made aware that you filed for bankruptcy. If you have to attend a meeting about your bankruptcy and you choose to tell your employer where you are going, your employer will obviously find out.
If your wages are currently being garnished by a creditor, your employer will find out about the bankruptcy. Your employer will be told to stop garnishing your wages because of the automatic stay that is a part of the bankruptcy. If your employer is a creditor of yours, your employer will find out about the bankruptcy because all creditors are notified. Finally, if your employer for some reason performs a credit check on you, they may find out about the bankruptcy filing.
Federal Laws Protecting Employees Filing Bankruptcy
Even if your employer does find out about the bankruptcy, they cannot fire you because of it. Under federal law, no employer can fire an employee because the employee either filed for bankruptcy, has not paid a debt that was discharged in bankruptcy, or was insolvent before the bankruptcy.
However, you can still be fired for other reasons unrelated to the bankruptcy. If you slack off at work, or if your company is downsizing, and you just happen to be going through a bankruptcy at the time, that does not mean that your job is protected. You can still be terminated for other reasons. The key issue is being able to prove that the loss of your job was related to the bankruptcy, not other issues.
You also cannot be treated any differently at work because of your bankruptcy filing. If you were set to get a raise or a promotion, but you were denied after your employer found out about the bankruptcy, that is illegal. It’s also illegal to demote an employee or lower his or her salary because of a bankruptcy.
If you are seeking a job, however, your bankruptcy can be an issue. Many employers require background checks or credit checks as part of the hiring process. Your bankruptcy will show up in those credit reports, and an employer can refuse to hire you because of the bankruptcy. That rule only applies to private employers – a government cannot refuse to hire you because of a bankruptcy in your past.
Get Bankruptcy Assistance from Holston & Huntley
Are you considering filing for bankruptcy but are worried about your job? Or do you think you have been fired because of a bankruptcy filing? If so, you should consult with a bankruptcy attorney. At Holston & Huntley, our Atlanta bankruptcy attorneys will work with you to find a solution to fit your situation. You may consider a Chapter 7 or a Chapter 13 bankruptcy, or another option may be better for you.
Call us today to learn more. We serve Metro Atlanta, Georgia as well as Birmingham, Alabama, including surrounding areas.