filing bankruptcy

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When it comes to considering filing bankruptcy, you probably have a lot of things on your mind: How will it affect your finances, your life and maybe even your job?

Filing bankruptcy is not a decision that should ever be taken lightly, but luckily, when you do so, it’s unlikely to affect your employment.

Generally, if you are already employed, your employer cannot fire you because you file bankruptcy as the bankruptcy code (federal law) has anti-discrimination provisions protection your job, as well as other situations. The bankruptcy cannot be the sole reason for firing or demoting an employee.

There are exceptions, however. If you are looking for employment, private employers – as opposed to government employers – might not hire you if you file for bankruptcy, especially in certain industries such as financial fields.  

Telling your employer

For most people, your employer will not find out about your bankruptcy and you are not legally required to tell your employer when you are filing bankruptcy. However, it is public record, so anyone could technically look up your name and find the filing. And sometimes, you have to list creditors, so if you have a retirement loan, your employer could be notified.

But ordinarily, it can be kept private.

Losing your job

No one should ever lose their job simply for filing bankruptcy. Your employer also cannot legally change the terms of your employment: Your job title, your wages etc.

Employers rarely find out if someone has filed Chapter 7 bankruptcy, so you likely won’t need to worry.

Long term issues

If you have filed for bankruptcy in the past, you should not be required to disclose this to potential employers. However, for some jobs that require you to handle money or have a security clearance, it will likely come up during a background check – so be prepared. Moreover, most employers now look at credit reports of potential employees, so it is best to be honest and handle the matter thoughtfully.

Mina Nami Khorrami LLC

At Mina Nami Khorrami LLC, our legal experts are here to help you understand filing bankruptcy – every step of the way.


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