Can Filing for Bankruptcy Affect Your Job?
Bankruptcy has an undeniable stigma attached, but this stigma has more to do with applicants’ preconceived notions about the process than it does with legal or even social consequences. Ultimately, bankruptcy is likely to have less effect on your job than the seemingly unstoppable stream of debt collectors’ calls can. If you have questions or concerns about bankruptcy, don’t delay consulting with an experienced Harrisburg, PA, bankruptcy attorney.
Filing for Bankruptcy Shouldn’t Cause You to Lose Your Job
Neither government nor private employers can fire you or change the terms of your employment based solely on your filing for bankruptcy, and this includes:
- Taking away your work-related responsibilities
- Demoting you
- Reducing your pay
While your employment can’t be altered in response to bankruptcy, it’s also true that bankruptcy can’t be used as a shield to protect you from any valid reasons your employer may have for changing the terms of your employment or for firing you, including each of the following:
- Dishonesty
- Chronic tardiness
- Incompetence
Your Employer Is Unlikely to Know You’ve Filed for Chapter 7 Bankruptcy
If you file for Chapter 7 bankruptcy, which is a liquidation bankruptcy, your employer is very unlikely to know. Chapter 7 bankruptcy is only available to filers who are unable to make regular monthly payments toward their accumulated debts. Chapter 7 bankruptcy generally discharges – or eliminates – all unsecured debts, which are those debts that don’t involve any collateral.
Chapter 13 Bankruptcy
If, on the other hand, you file for Chapter 13 bankruptcy, your employer is more likely to be involved in the process. Chapter 13 bankruptcy is often referred to as a wage earner’s plan, which means that it allows anyone who earns a regular income to devise a plan to repay all of their debt or the part of their debt that they’re able to address. With a Chapter 13 bankruptcy, you’ll propose a plan that addresses repaying your debt through installments over three to five years – depending on your income and the circumstances involved.
If you do pursue a Chapter 13 bankruptcy, the court may require that your payments come through your employer in the form of automatic deductions from your wages. Under such circumstances, your employer will serve in the role of the payment collector – ensuring that you keep up with your repayment obligations. As mentioned, however, you can’t be fired – and your job can’t be diminished – solely in response to your bankruptcy filing.
Future Job Opportunities
When it comes to future job opportunities, government agencies at the local, state, and federal levels can’t take your bankruptcy into consideration. Private employers, however, can. This is likely to impact you more significantly if the jobs you’re applying for require involvement in financial dealings, such as positions in payroll, accounting, or bookkeeping.
Reach Out to an Experienced Harrisburg Bankruptcy Attorney for the Help You Need Today
The formidable Harrisburg, Pennsylvania, bankruptcy attorneys at Cunningham, Chernicoff & Warshawsky, P.C., have decades of experience helping clients like you maximize the benefits and minimize the challenges of bankruptcy, and we welcome the opportunity to help you as well. Our seasoned legal team is standing by to help, so please don’t delay reaching out and contact us online or call 717-260-3527 for more information about what we can do to help you today.