I get many questions about how bankruptcy will affect a client's life going forward. Usually it is how it will affect their credit score or sometimes how it might affect security clearance or military service. However, one question that is not usually asked is how it will affect future employment.
Many of my clients retain me because a job loss caused their financial difficulties. They are hoping that they will be able to get a job before the unemployment benefits run out. Unfortunately, recent federal court decisions have shown that a bankruptcy on your credit report can make that goal harder to attain.
Private Jobs Tough to Get . . .
The bankruptcy code specifically states that an employer cannot fire you for filing bankruptcy; however, the same is not true if you are looking for a new one. Section 525(b) of the Code says that,
"No private employer may terminate the employment of, or discriminate with respect to employment against, an individual who is or has been a debtor [in bankruptcy]."
Specifically absent from this section, says the Federal Third Circuit case of Rea v. Federated Investors, 627 F.3d 937 (3d Cir. 2010), is anything about discrimination against job applicants.
. . . But Not Public Jobs!
The prospects are better if you are seeking public employment, however. Section 525(a) states that a "governmental unit may not ... deny employment to, terminate the employment of, or discriminate with respect to employment against, a person that is or has been a debtor under this title...."
It was the difference in language between these two sections that led the federal courts to conclude that Congress intended to exempt private employers from this "anti-discrimination" hiring requirement.
This is something important to bear in mind when applying for a job, especially one that involves handling money. If you are currently employed, but looking to make a lateral move, you should consider doing so before you file bankruptcy. Once you have the new job, they can't fire you from it (at least without violating the bankruptc code and being liable for suit).
So What Do I Do?
If you live in southern New Jersey, are in financial difficulty, and are thinking about filing bankruptcy, please feel free to call my office at 856-432-4113 or contact me through this site for a free consultation in my Woodbury office to discuss your case.
If you are just looking for more information about bankruptcy, then download my free book,Top Questions People Ask About Filing Bankruptcy in New Jersey.