Bankruptcy filers receive a number of protections in Section 525. Governmental entities may not discriminate in a wide variety of ways including denying or failing to renew licenses.
Especially those in the military and others with security clearances are almost always better off filing, because they are perceived as less of a risk without debt. The UCMJ (Uniform Code of Military Justice for those not familiar) has an offense for dishonorably failing to pay a debt. Bankruptcy protects service members from prosecution for this as you no longer owe the debt. Private employers may not terminate employment or any anyway discrimate against an employee for being in bankruptcy. The open question however is whether they can refuse to hire a person initially. The law is not clear. Courts have ruled differently on this issue. I am taking a case up the appellate process right now on this very issue. It involves a company who refused to hire an applicant with stellar credentials and impeccable character becasue of a bankruptcy.
I think it is very short sighted of employers to do this. The good news is that this is an exception rather than the rule. Most employers acknowledge that bankruptcy is the honest and responsible way to handle being over-indebted and respect those who do so. The one client I am suing for is the only one I have ever heard of who has been denied a job because of a bankruptcy.
Bankruptcy FAQ – Frequently Asked Questions
by Alex Wathen, Board Certified Consumer Bankruptcy Law – Texas Board of Legal Specialization
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“Honest people are routinely taken advantage of by powerful banks and finance companies who know the rules. I work to level the playing field.”
Alex Wathen, San Antonio Bankruptcy Attorney-Lawyer
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We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
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