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Will Filing Bankruptcy Affect My Employment?

How does bankruptcy affect employment?
Bankruptcy may be filing be considered if you are applying for a non-government job. However, most employers understand that there are many reasons a person may find themselves filing for bankruptcy. Protracted unemployment, extensive medical expenses can cause even the most responsible person to face bankruptcy. In most situations, your bankruptcy filing likely won’t affect your present employment. Government employment won’t be affected at all.

Petition to File For Bankruptcy

Will filing Bankruptcy get me fired?
You can’t be fired for filing bankruptcy. Moreover, an employer may not reduce your salary or other, lower your job responsibilities, or demote you for filing for bankruptcy. However, if there are other valid reasons for taking these actions, the fact that you filed for bankruptcy won’t protect you.


How Employers Find Out About Bankruptcy Filings:
If you file for Chapter 13 bankruptcy, your employer is likely to learn of your bankruptcy case. If you have a regular job with regular income, the bankruptcy judge may order your Chapter 13 payments to be automatically deducted from your wages and sent to the bankruptcy court. (This is called an “income deduction order.”) In effect, your employer will be pressed into service as a sort of collection agency, to make sure you honor your Chapter 13 that risk. Bankruptcy usually works more in your favor than to your detriment.

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