Filing Bankruptcy in NJ Can Make Getting a Job More Difficult

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. 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.

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...." [emphasis added] 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). If you are in financial difficulty and thinking about bankruptcy, you should contact my office for a free consultation about your case and weigh your options in the job market.

Looking for more information about bankruptcy? Get the answers to the most frequently asked questions by downloading my free book, Top Questions People Ask About Filing Bankruptcy in New Jersey. It will give you the answers you need all in one place. Then call me at 888-857-8418 or contact me through this site for an appointment for a free consultation to discuss your case.