Will Your Boss Find out about Your Bankruptcy?
Most Florida employers run a background check on job applicants, and any bankruptcy you file will show up for years afterwards. But what if you are already employed? Will your boss find out about the bankruptcy, and can you be fired? Our Plantation bankruptcy lawyer reviews when and why your employer will find out.
Chapter 7: Probably a Secret, Unless…
In Florida, about 2 out of 3 bankruptcies are Chapter 7. This is a relatively straightforward bankruptcy you can complete in a matter of months. Although your creditors are notified, your employer is not. Whether you tell your employer about the bankruptcy is up to you.
There is an exception, however. Your wages might be garnished to pay back a creditor. When you file for bankruptcy protection, an automatic stay automatically goes into effect that halts all collection efforts on pre-petition debts. If a creditor has garnished your wages, your attorney will probably notify your employer to stop it.
Of course, if your wages are being garnished, your employer already knows about that and can probably figure out you have suffered financial difficulty. There is no reason to assume an employer will be outraged to find out you are declaring bankruptcy. Instead, you could highlight how you are taking control of a difficult situation.
Chapter 13: Yes, if a Wage Order is Imposed
With a Chapter 13 bankruptcy, a debtor sticks to a 3-5 year repayment plan where they contribute their disposable income to their creditors. They also pay priority debts in full, such as past-due child support payments. By sticking to a payment plan, however, the debtor is protected from collection activity. They also should not lose any property at the completion of the payment plan.
Nevertheless, an employer might find out about this bankruptcy if the judge enters a wage order to have an amount automatically deducted from your paycheck. Generally, having an order entered makes payment easy since you don’t have to think about cutting a check every month. If you are still worried about an employer finding out, consider the alternatives—without bankruptcy, your debts will continue to accumulate, leaving you in a lurch.
It is Illegal to Fire Someone for Filing
There is good news if you are worried about your job. Federal law makes it illegal for an employer to fire an employee because they filed for bankruptcy. This law covers private employers, too, not simply government employers. It is also illegal to discriminate on the terms of employment because you filed for bankruptcy, so you should not be demoted or have your paycheck cut.
The protection is somewhat limited, admittedly. Federal law prohibits discrimination when it is based solely on filing for bankruptcy. An employer can still take adverse action if they have grounds, such as poor performance or tardiness.
Let’s Talk about Bankruptcy
Many people agonize over whether to file, fearful of the negative consequences. At Nowack & Olson, our Plantation bankruptcy lawyers believe our clients should make an informed choice. For that reason, we fully discuss our clients’ concerns but help them see the big picture. To schedule a free consultation, call us today at 888-813-4737.