There have been a lot of stories lately about the new bankruptcy laws and what they mean to potential filers seeking some financial relief through the bankruptcy codes. According to the rumor mill, your employer can fire you if they find out that you’ve been involved in the process.
Well, the rumor mill will always be filled to the top with rumors and not truths. The fact is, has always been, and shall remain this: It is illegal to terminate employment of any individual who has filed for bankruptcy protection, in any of its forms.
Can You be Fired for Something Else Instead?
Of course! Even though an employer can’t fire you for declaring bankruptcy, they can keep a sharp eye on you and release from employment for something else. This is sometimes referred to as “The Paper Trail”, a period in which an employer writes one up for every little thing in order to dismiss them from work. Is this legal? Yes, it is.
Can Filing Bankruptcy Prevent you from Getting a Job
Yes. Since potential employers have the right to ask you to sign a background check before any offer for employment be made, they can decide not to hire you due to this black mark on your credit history . Some employers may feel as though you are a bigger risk, even though it may not be the case at all.
Bankruptcy (and the roads before and after) can be a very humbling experience for so many of us. Knowing your legal rights as well as what you can expect are just a few of the necessary preparations for a smoother journey as you head down the highway to federal bankruptcy court.
