Richard K. Gustafson


Added: 09/29/2009

Can Personal Bankruptcy Affect your Job?

There’s a terrible myth that filing bankruptcy can have negative impact on your job. Is there any truth to
these myths? Can you lose your job for simply participating in a bankruptcy as a solution for your financial troubles?

Luckily, there is very little truth to these myths. 11 U.S.C. §525(b) provides:

“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 –

(1) is or has been a debtor under this title or a debtor or bankruptcy 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 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.”

This is good news for many financially stuck individuals who are considering bankruptcy as a solution to
their financial difficulties. The idea of being fired while attempting to recover from near financial ruin is quite terrifying, but you can rest assured that filing a personal bankruptcy will never be the cause of such a situation.

If you do decide that filing a chapter 7 or chapter 13 bankruptcy is the best solution for you, you’ll be less stressed and sleep better at night. This will reflect on your work and make you a more capable employee. So can personal bankruptcy affect your job? The answer is yes, it can, but those effects will be more positive than you may have first imagined.

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