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New Jersey bankruptcy

Can I Get Fired for Filing for New Jersey Bankruptcy?

On Behalf of Veitengruber Law | Dec 11,2020

Under the US Bankruptcy Code, an employer is not able to fire you because you have filed for bankruptcy. So if you have gone through bankruptcy or are currently going through bankruptcy, your employment is protected under the law. This law covers both private sector and public sector employees, but differs in the scope of protection for each. Here is everything you need to know about how bankruptcy can impact your employment. The Bankruptcy Code specifically prohibits government employers from discriminating against current employees who are currently filing or have previously filed for bankruptcy. Similarly, they cannot discriminate against prospective hires. In the private sector, employers also cannot discriminate against current employees. However, the Bankruptcy Code doesn’t specifically prohibit employers from discriminating against prospective employees. The definition of “employed” has been debated in cases of bankruptcy discrimination. There has been precedence that once a person signs a W-4 and an I-9 and signs required employee agreements, they are legally considered an employee and therefore protected under the Bankruptcy Code’s discrimination laws. The best thing you can do if you think you are being discriminated against by an employer is seek legal help. What you can take away from this is that if you are employed, your employer cannot fire or penalize you after you file for bankruptcy. This discrimination can include a demotion, unequal treatment, or being refused a promotion on the basis of your bankruptcy. If you are looking for a new job, however, you should be aware that private sector employers are not prohibited from discriminating against you. Do not let this dissuade you from applying for positions, just be aware of the obstacles you may face. Your employer will not necessarily know about your bankruptcy. Though it is public record and anyone has the ability to search for this information, most of the time an employer is not going to bother searching. Potential employers also likely will not be looking for this information unless you are applying for a job that deals with making big financial decisions or you require a security clearance. The only reason you would need to inform your employee of your bankruptcy is if it is explicitly stated in the employee handbook you receive upon being hired. Other than situations in which you must share your bankruptcy with an employer, there are a few exceptions. If your employer or former employer is to be listed as a creditor in the event that you owe the company money, they will be notified. Your employer will also be notified if you miss a payment in a Chapter 13 bankruptcy repayment plan. In this case, your employer will receive a request to have your wages garnished. If your bankruptcy case comes up with an employer or potential employer, tell the truth but be brief. If you are worried about filing for bankruptcy because of how it will affect your employment, rest assured that your livelihood will almost always be protected. It’s more important to take care of your financial issues before they spiral out of control. The longer you let your financial woes drag out, the higher the chance of your employer finding out. Veitengruber Law can help. We can demystify the Bankruptcy Code to make sure you understand your rights.


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