Can I be Denied a Job Because of Bankruptcy?

The Answer May Hinge on Whether Your Employer is Public or Private

I Need to File Bankruptcy, But I’m Worried About My Job…Can I Get Fired?

If you have a job, need to file bankruptcy, and are worried about getting fired because of it, you probably shouldn’t be. The bankruptcy code prevents employers from firing you just because you have filed for bankruptcy. However, if you are a job seeker, need to file bankruptcy, and are worried about being denied a job, you might have cause for concern. Under the current state of the law, a private employer can deny you a job if you are currently in or have filed for bankruptcy, whereas a public employer cannot. Section 525(a) of the Bankruptcy Code provides:

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 [Title 11] or a bankrupt or a debtor under the Bankruptcy Act 

Notice that section 525(a) applies only to public employers. The behavior of private employers is governed by section 525(b) which prohibits discrimination based on bankruptcy, but does not contain the language of 525(a) which addresses denying employment to a debtor based on a bankruptcy filing. The bankruptcy code has this to say about discrimination by private employers:

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

Reference National Bankruptcy Forum

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