Suffering an Unfair Job Loss is Tough, our california employment attorneys can help.

U.S. Bankruptcy Code Prohibits Employment Discrimination

June 13, 2012

If you are contemplating filing for a Chapter 7 bankruptcy in Los Angeles, it's probable that unemployment may have been a factor. professionalwoman.jpg

But will a bankruptcy affect your chances of future employment?

L.A. Bankruptcy Lawyer Vincent Howard knows: It shouldn't.

In fact, federal Bankruptcy Code 11 U.S.C. 525 shields you from employment discrimination solely because you have filed for a bankruptcy. In fact, employers are not allowed to fire you because you filed for bankruptcy and aren't allowed to discriminate against you for potential employment on the sole basis of your bankruptcy.

It specifically prohibits both government agencies and private employers from this kind of action. This same statute protects you from being denied a student loan on this basis as well.

However, with private companies, bankruptcy can be used as a factor in determining whether hire or promote the debtor - so long as it's not the sole factor.

Now once upon a time, bankruptcy did have a fairly harsh stigma attached to it, and laws like this prevented employers from harming a person's chances of getting back on his or her feet.

Not so anymore.

These days, far more people have had to turn to bankruptcy in the wake of this recession, with its high unemployment rates, staggering medical bills, divorce and cyclical debt. No longer is bankruptcy and foreclosure seen as a mark of irresponsibility. In fact, both can be seen as making a decisive action that makes smart financial sense.

That said, does discrimination ever happen? Sure. And courts have interpreted the bankruptcy code to essentially mean that private employers aren't tied to the same strict standards as governmental agencies when they learn a prospective employer has a past bankruptcy. This is especially going to be the case for those who work in the financial sector.

But again, there is a greater acceptance given the growing numbers. If employers turned away everyone who had ever endured a financial struggle, there would be very few people left to hire.

In Bankruptcy Attorney Vincent Howard's experience, many clients go on pursue successful careers following a bankruptcy filing. While there's no hard-and-fast rule about this, one thing that seems to help is if prospective workers are honest with their potential employer about from the start. They may appreciate the upfront candor. And if they would have found out through a background check anyway, it's best to beat them to the punch with it.

Los Angeles Bankruptcy Attorney Vincent Howard at Howard Law can help. You can reach us toll-free at 1-800-872-5925 or send us a message online.

Additional Resources:
Can a Past Bankruptcy Harm My Job Chances?, By Justin Harelik, Fox Business

More Blog Entries:
In re: Smyth v. EdAmerica Inc. Rules on Role of Bankruptcy in Student Loans, June 4, 2012, Los Angeles Bankruptcy Lawyer Blog