Many people wonder what changes may occur at their jobs if they file for bankruptcy. Can you get fired? Will your colleagues find out? Here are the answers to common questions about bankruptcy and your job.
Will I get fired if I file for bankruptcy?
Likely not. The official bankruptcy code has a section that prohibits employers from firing staff or employees solely because they filed for bankruptcy. It’s even illegal to diminish your job by reducing working hours, removing responsibilities, cutting your pay or demotion.
However, employers can fire you for a number of other reasons, some of which may or may not be directly related to your bankruptcy filing. Your boss may terminate your employment if they find out you have gambling or drug issues, or have been involved in criminal activities like fraud, theft, or embezzlement, even if those are the reasons you file for bankruptcy.
If you file because you’re behind on bills or you’re not disciplined in money management, there’s no reason for your boss to fire you.
Do my boss and coworkers have to know?
Maybe, but they may find out anyway. Bankruptcies are public, so anyone can find out if they search for it. In a Chapter 7 bankruptcy, all activity is taken care of without needing information or action form your employer, so as long as they don’t search for it, they’d never know.
In Chapter 13 bankruptcy filings, however, the trustee will likely need to contact your employer to set up repayments to your creditors directly from your paycheck. In this case, there’s no way around your employer finding out, but it’s not uncommon for companies to employ several staff members who have filed for bankruptcy.
Will I lose access to my company credit card?
Perhaps. You will most likely have to list your card while filing, in which case the account will probably be closed. Even if you fail to list the card, there’s little doubt that lenders will find it and close the account.
In this case, your employer may issue you another company credit card, a company debit card or allow reimbursements. This depends entirely on the employer’s decision.
Starting the Process
Want to make sure everything concerning your job goes smoothly when filing for bankruptcy? Give us a call. We’ll walk you through the process and get you the best results possible.