You might be hesitant when it comes to filling for bankruptcy because you are afraid you might lose your job. If you cannot meet your financial demands with a job, how would you ever without one?
You might also be worried that if you filed for Chapter 7 or Chapter 13 bankruptcy that a potential employer will deny you employment because of it. Again, it would be might difficult to get your finances back on track and in order without an income from employment.
So, does bankruptcy affect your employment or potential employment?
It is safe to say that you will not lose your job solely due to filing for bankruptcy. No employer — government or private — can use you filing for bankruptcy as cause to change terms or conditions of your employment. This means they cannot use it to demote you, reduce your salary, take away responsibilities or fire you.
Keep in mind that other valid reasons exist for firing you, such as incompetence, dishonesty, tardiness, etc. You filing for bankruptcy will not hide or protect you from those reasons. But if none of those exist and you are fired shortly after filing for bankruptcy, you might have a case against the employer for illegal bankruptcy discrimination.
In most cases, especially with Chapter 7 bankruptcy, your employer will not find out about your filing. But if a creditor has sued you, obtained a judgment, and began garnishing your wages, then your employer will be made aware. This is because in order to stop the garnishment, your employer must have knowledge about the bankruptcy.
In some cases under Chapter 13 bankruptcy your employer will know of your filing. If you have a regular job with regular income, the judge may order your payments to be automatically deducted from your wages. In this instance, your employer serves as almost a collect agency, making sure you honor your Chapter 13 plan.
Now, when it comes to applying for jobs and potential employment, you should be happy to know that no federal, state, or local government agency can consider your bankruptcy when deciding to hire you. Only private employers retain the power to do so. Jobs that require you to deal with money (accounting, payroll, etc.) tend to be more weary about hiring those who have filed for bankruptcy. It is also important to note that those private employers tend to do credit checks on job applicants and filing for bankruptcy would appear on your credit report.
If you are thinking about filing for bankruptcy and are worried about what it could mean for your future, then you should contact an experienced lawyer. Joel R. Spivack is an experienced bankruptcy lawyer in New Jersey that is ready to get you back on the right financial path. Contact the Law Office of Joel R. Spivack at 856-861-6203 or via our online contact form today for an initial consultation about your case.
The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney/client relationship. If you are seeking legal advice, please contact our law firm directly.