Will My Employer Know That I Filed Bankruptcy

Some people hesitate to file a Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy, because they are concerned that their employer will discover that they have filed a bankruptcy petition, and this action will prove harmful to their career. Sometimes they will even put off visiting a bankruptcy lawyer to consult upon the benefits of the action.

When individuals bring up this concern, their bankruptcy lawyer will usually point out that an employer would be breaking the law, if they discriminated against one of their workers who filed either a Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy. This information puts most people at ease; however, some individuals to not find that this explanation offers enough comfort. They might worry that once their boss learns about the filing, he may still want to fire them, and he will look for some other explanation for the termination that will disguise the true motive. Or the concerned individual might work for a small company, who may not retain an employment lawyer, whom they can consult before they decide to let the employee go, and the management might not even realize they are breaking the law.

It does not seem likely that this penalization with a disguised motive would actually occur, but it is also hard to be positive that it could never happen. What the bankruptcy lawyer can offer as additional assurance though, is the fact that the debtor’s employer is unlikely to know that a member of his staff has filed a bankruptcy. The court does not notify an individual’s place of employment, when he or she files bankruptcy, and it is unlikely the company will discover the information through other sources.

One exception of course is when an employer is already garnishing a worker’s wages because of a court judgement against the employee. In that case the bankruptcy lawyer will have to notify the payroll department that the worker has filed bankruptcy in order to stop the garnishment. However, this would be a case, where the employer will already know that the worker has financial problems, and if anything the company should be happy that it no longer needs to go through the extra paperwork that the garnishment requires.

One final note on this subject is that bankruptcy is a public record, and if someone wanted to know, if you filed a Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy they could go to the court and check the records. However, finding those records is not an easy task, and it is hard to believe that anyone would make that effort unless they already strongly suspected the bankruptcy. Certainly a well advised employer would not check for his employee’s bankruptcy filing for the simple reason that such an effort on a company’s part could be taken as circumstantial evidence that they intended to break the law by penalizing the bankrupt employee.