Bankruptcy attorneys are often asked whether someone can be fired from their job if they file for bankruptcy. The short answer is NO.
The Bankruptcy Code contains specific protections for people who file. Section 525(b) says:
"No private employer may terminate the employment of, or discriminate with respect to employment against, an individual who is or has been a debtor under this title, a debtor or bankrupt under the Bankruptcy Act, or an individual associated with such debtor or bankrupt, solely because such debtor or bankrupt-
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(1) is or has been a debtor under this title or a debtor or bankrupt under the Bankruptcy Act;
(2) has been insolvent before the commencement of a case under this title or during the case but before the grant or denial of a discharge; or
(3) has not paid a debt that is dischargeable in a case under this title or that was discharged under the Bankruptcy Act. "
In other words, if you're fired solely because you filed for bankruptcy, your employer is breaking the law, and you can sue for losses and damages.
However, if you are currently looking for work, a potential employer does have the right to ask whether you have filed for bankruptcy in the past. Potential employers can also request permission to pull your credit report in reviewing your application for employment. This type of inquiry happens most often for job seekers looking for work in the financial industry, such as banking. I frequently recommend that job seekers divulge past bankruptcy filings openly as soon as an inquiry about bankruptcy from a potential employer is made. Being open and honest about the circumstances of why you filed for bankruptcy may help an interviewer understand that bankruptcy was an extraordinary circumstance in your life, and not an indication of neglect or mismanagement.
Overall, bankruptcy should have no impact on a current job and should affect job seekers minimally depending on what particular industry in which they are interested in seeking employment.
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