Will you get fired for going bankrupt?

On Behalf of | Jan 29, 2020 | Bankruptcy |

The monetary pressures on your life are already overwhelming and it only takes a month or two of bad luck, car problems, medical bills or something else to put you in a financial hole you can’t hope to escape.

Bankruptcy seems like your only option — but you’re worried about what will happen to your job once your employer finds out. You know that your company is rather particular in its hiring practices and you’re concerned that your financial status may be enough to trigger your dismissal.

What should you do? Here’s what you need to know to start making the best decision for your situation:

You cannot legally face discrimination.

Bankruptcy protection exists for a reason, so the law has a built-in anti-discrimination policy that is supposed to protect people from employment discrimination.

However, that protection isn’t absolute. Your employer can still find another reason to terminate you — especially if your bankruptcy is due to some sort of questionable financial decisions, a gambling problem or a similar issue.

Your bankruptcy could even help you.

On one hand, your employer may frown on your situation if they believe that a preventable financial excess led to the problem. Your employer may now view you as a “high-risk” employee who could be a security risk if whatever led to your financial trouble is still an issue. This could be particularly problematic if you need to pass a regular security clearance.

On the other, your bankruptcy may be seen as a corrective measure that makes you less of a security risk. People who are in overwhelming debt may be desperate enough to sell company secrets or steal — but people who are dealing with their financial crisis in an upfront manner may not pose that kind of risk.

Your employer may never even know.

There’s also a possibility that your employer won’t ever know about your bankruptcy. Chapter 7 bankruptcies are over fairly quickly and don’t require a repayment plan, so there’s no reason to notify your employer. (Technically, bankruptcy filings are public record, but people seldom go looking for them.)

What’s right for you? Find out more about your legal options and discuss the specifics of your case by contacting our office directly.