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Is Employment Discrimination Based On Bankruptcy Legal?


Bankruptcy is structured to provide financial relief and a fresh start. And while no one actively seeks to end up in debilitating debt, it is nice to know that the law regarding bankruptcy provides many people with a legal and viable option for finding a way out of it if it happens. You may also be surprised at how much love and support you receive from your family, friends and other loved ones during the bankruptcy process. However, you should remain aware that there are others who may not look so favorably at your situation – including your current employer. Employment discrimination is unfortunately a real possibility that debtors have to deal with more frequently than they should.

Is Employment Discrimination Legal?

Federal law actually prohibits employment discrimination because an employee has filed for bankruptcy. This law is intended to halt discriminatory behavior by both private and public employers and the protections of the law are in place whether the individual has a pending bankruptcy case or previously filed for bankruptcy. Despite the illegality, a surprising number of employers still terminate a borrower’s employment or otherwise act in discriminatory ways solely because that person happened to be their employee and happened to file for bankruptcy.

Understanding Employment Discrimination

Even after understanding that employment discrimination itself is a legal no-no, it can still be difficult to figure out exactly what constitutes discrimination. The best way to find out whether behavior that has been directed at you constitutes employment discrimination is to reach out to the attorney who is assisting you with your bankruptcy. However, there are some acts that tend to be generally viewed as discrimination such as:

  • Termination of employment
  • A reduction in pay
  • Refusing to consider the employee for other positions
  • Creating an abusive work environment
  • Denying certain benefits and perks

Should I Just Wait to File for Bankruptcy if I am Worried it Could Cause Problems with My Employer?

Unfortunately, delaying filing for bankruptcy could cause problems depending on the current status of your defaulted debts. Notably, waiting to file in order to avoid an employer finding out about your financial status will become pointless if creditors seek a judgment to garnish your wages anyway. If you have questions about whether this is the right time to file for bankruptcy, you should seek legal assistance.

We Will Make Sure You Are Treated the Right Way

If you are concerned with being discriminated against post-bankruptcy solely on the basis of having filed for bankruptcy or otherwise have questions about how bankruptcy works, it is imperative that you obtain legal help as soon as you can. As the Plantation bankruptcy attorneys at Nowack & Olson, PLLC, we can help whether you are trying to recognize the signs of bankruptcy discrimination or are simply pondering whether bankruptcy is the right choice. We understand how complicated it can be to understand the protections of bankruptcy law and how hard it can be when you are against creditors or even an employer who doesn’t understand. You can rely on us to have your back throughout this process as soon as you reach out to us for a free consultation.



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