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Can I get fired for filing bankruptcy?

Individuals can't be fired for filing bankruptcy, but hiring may be affected.

Firing people from a job because they filed bankruptcy is illegal, but that doesn't mean that their employment won't be affected to some degree because of their financial circumstances.

Both government and private sector employers are prohibited from firing anyone for filing a petition with the U.S. Bankruptcy Court, and if such a firing is suspected, an individual may have the basis for a bankruptcy discrimination case, according to PayingPaul.com.

However, if someone is seeking a job with a private company, they may be asked to provide information about their creditor record, which will indicate if they have been granted a bankruptcy discharge from their debts. Some prospective employers may regard a bankruptcy as an indication that the job applicant is not reliable, particularly if the job involves financial services.

With a job in the public sector, that's not the case. "For local, state and federal government jobs, you cannot be rejected, declined or refused employment for this reason," the website states.

Current employers aren't likely to find out if an individual has filed a Chapter 7 bankruptcy. But in a Chapter 13 case, in which payments for court-ordered repayment plan may be automatically deducted from the worker's paycheck, the employer will be notified.

If the debtor refuses to allow the court to make paycheck deductions to pay back creditors, it may be reason enough to dismiss the case because the court may not believe that payments will be made on a monthly basis without tapping into the paycheck.

Even if an employer finds out about a bankruptcy, employees cannot be denied a promotion because of their financial situation. "The basic rule of thumb is that an employer can only consider before offering you work.," states the website. "After that, they have to ignore the bankruptcy completely from any decisions they make regarding your career."

There is one scenario in which filing bankruptcy might affect a bid for government work, although job applicants are more likely to be seen as untrustworthy if they amass debt without seeking court relief. That includes any job that requires security clearance for government work. "Most employers will view your filing bankruptcy as the responsible thing to do," writes Washington attorney Jay Jump for NationalBankruptcyForum.com. "This is because you will put a stop to all of the at-work collection phone calls, the garnishments and the work interruptions. You will be dealing with the situation rather than ignoring it."



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