Clients always want to know if they can be fired for filing bankruptcy. The short answer is: No you can’t be fired for filing. The job you have is safe if you file bankruptcy. The job you want, on the other hand, may not be yours if you file bankruptcy.
There are important caveats that you will need to understand before deciding to file either Chapter 7 or Chapter 13 bankruptcy.
First off: A May 2011 case from the 11th Circuit Court of Appeals outlines the nuances and subtleties of how the court’s holding impacts your life.
We have always known that people who hold government jobs are protected from being fired from one’s current job and also being discriminated against for filing bankruptcy when it comes to looking for a new government job, or getting promoted.
What was murkier discrimination-wise was the distinction between keeping one’s current job and obtaining a new job when it comes to private employers.
The Myers decision makes clear that private employers can deny employment to potential employees because the have filed bankruptcy. Private employers cannot fire you strictly because you filed. Private employers cannot refuse to promote you because you filed. But they absolutely can refuse to hire you.
How do they find out that you’ve filed? They can ask you. And if they don’t ask you, information about your bankruptcy case appears on the first page of your credit reports. Unless Congress changes the law to protect your financial privacy, you’ll most likely give employers the right to review your credit history as part of your application.
I can’t tell you if your future employer will care more that you filed bankruptcy than he or she will care that you had a string of bad debts before you filed, and that would have still been around your neck had you not filed bankruptcy. I can’t tell you if your employer will care more about where you went to college, , your hometown, which fraternity you pledged, your religion, or where you live, or what care you drive, than whether you filed bankruptcy.
I know that in the early days of no-fault divorce, interracial marriages, and women’s entrance into the workforce that employers had many reasons to discriminate—and that they did discriminate against potential employees for many reasons that would shock the conscience today.
I will counsel you that an employer who won’t hire you because you filed for bankruptcy is most likely not an employer you would want to serve.
Don’t let this fear stop you from determining whether it’s in your best interest to file bankruptcy.
