Filing for bankruptcy is a major event in your life and can be the catalyst for many changes but you may be worried about the consequences. Besides wondering about your credit score and other troublesome questions, you may be concerned about your employment status. One question people often ask is if they can lose their job because they filed bankruptcy.
Bankruptcy Protection Laws
Section 525(b) of the U. S. Bankruptcy Code makes it illegal for an employer to fire you just because you have filed bankruptcy. If you have reason to suspect that you were fired for that reason, you should speak to your Minnesota bankruptcy lawyer as soon as possible.
Will Your Employer Know you have Filed Bankruptcy?
The answer to that question often depends on which type bankruptcy you choose to file. The only time your employer will be officially notified of your financial status is if your paycheck is garnisheed so your creditors receive their money. If that happens, the court must notify your payroll department and provide them with the necessary information so payments are deducted from your paycheck. Normally this only happens if you choose to file Chapter 13 bankruptcy.
In fact, filing bankruptcy could be one way to help keep your employer from discovering your financial troubles. Once you have filed, creditors or collectors will no longer be allowed to make collection calls to you either at work or at home. The harassment will cease and you won’t be afraid to answer the phone any more.
At-Will Employment States
Minnesota, like most other states, recognizes at-will employments terms. At-will employment means that an employer can let you go, or discharge you, at any time without stating a reason. When that happens, even if you suspect it is because you filed bankruptcy, it can be difficult to prove.
If you are truly concerned that you might be fired because of your bankruptcy status, document any conversations with your employer where the bankruptcy was discussed and keep copies of all correspondence that mention your bankruptcy. If necessary, you will have this information to give your expert on Minnesota bankruptcy law.
If you do leave your job, whether it is involuntarily or not, remember that Section 525(b) of the Bankruptcy Code also protects you from hiring discrimination because of your bankruptcy. Regrettably, some employers choose not to hire people with poor credit scores or a bankruptcy on their record, but they cannot legally state that as a reason for not hiring you. Bankruptcy does bring change to your life, but fortunately, much of that change is positive. You have the ability to start your financial history anew and hope for a better future. Yes, bankruptcy can be frightening and cause a lot of questions to run through your mind. Make a list of those questions and discuss them with your Minnesota bankruptcy lawyer. The more you know, the less you will fear the consequences of bankruptcy.