Can employers discriminate?

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Updated: 4/13/2007 3:35 pm
You may be concerned about how your employment opportunities may be affected if you file for protection under a Chapter 13 bankruptcy. While it’s true that a bankruptcy filing appears on your credit report for up to 10 years and employers have the right to access your credit report with your permission during the hiring process, no employer can legally base employment decisions based solely upon your bankruptcy filing. In short, it’s against the law for employers to discriminate against you when making hiring, termination, or promotion decisions. If discrimination were allowed to exist, it would undermine the point of bankruptcy, which is to allow individuals with unmanageable debts to become productive again by unburdening them of the pressure and discouragement of previous debts. Obviously, you can’t become productive if you’re unable to obtain or keep a job based on your bankruptcy filing. The same reasoning applies to local, state, and federal government agencies in the granting of driver’s licenses, student loans, grants, and permits. Generally, if you’re already employed, your employer won’t even know of your bankruptcy, unless the court requires your employer to make payments to the Chapter 13 trustee on your behalf or the trustee contacts your employer to verify your income. Most of the time, though, only your creditors are notified by the court of your filing. Note that in terms of hiring, employers still have the right to take into account your financial integrity and character if they factor into your job duties. They can’t, however, make that decision based solely on a bankruptcy appearing on your credit report.
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