Will Filing for Bankruptcy Affect My Job?

Filing for bankruptcy in Maryland can be a challenging process, and many people are often concerned about how it will impact their job. When making an important decision to clean up your pending debt, it is important to understand that the process is designed to assist your financial struggles so that you can make a fresh start. Here, we will take a closer look at how filing for bankruptcy may affect your employment in Maryland.

1. It is illegal to be fired for filing for bankruptcy - Bankruptcy law provides certain protections for employees who file for bankruptcy. The Bankruptcy Code does not allow an employer to discriminate against an employee because of their bankruptcy status. An employer cannot terminate or demote you because you filed for bankruptcy.

2. Place of Employment; Your Current Job - When you file for bankruptcy, the Bankruptcy Court requires you to submit a list of your expenses and income. The court will also request information about your employment or other sources of income. If you change jobs, your income may change, which can impact your ongoing Chapter 13 plan. However, you can still continue to pay your monthly plan payments.

3. Wage Garnishment - If you are facing wage garnishment for unpaid debt, filing for Chapter 13 may put a stop to this action. If your wages have already been garnished, the court can order that the money is returned to you. This can help you retain your income and pay your regular monthly expenses.

4. Employer notification - Although employers cannot discriminate against employees for filing for bankruptcy, your employer will be notified that you have filed for bankruptcy. This is because the court will send out a notice of filing. However, the notice does not contain any details of your debts or financial situation.

5. Security Clearance - Many people with the highest level of security clearance can file for bankruptcy without negative repercussions. The Department of Defense has released a statement indicating the purpose of a security clearance is “safeguard classified national security information, based on his or her loyalty, character, trustworthiness, and reliability.” Therefore the filing of a bankruptcy case does not mean you are in disregard of these characteristics, rather, if you committed fraud or other illegal acts resulting in the bankruptcy, would most likely be more of a concern. In employment involving security clearance, you will most likely need to notify your employer. A bigger concern is if there was fraud committed on your behalf in filing the bankruptcy. A bankruptcy filing does not necessarily mean that you will lose your security clearance or your job.

Filing for Chapter 13 bankruptcy in Maryland can be a challenging time, but it is essential to understand that it is not likely to affect your employment status directly. The bankruptcy process provides protection against employment discrimination, so your employer cannot terminate or demote you because of your bankruptcy filing. Nevertheless, it is essential to speak with a qualified bankruptcy attorney who can provide guidance on your specific situation. They can help you navigate through the process and advise you on any potential issues that may arise. With the right guidance and proper legal representation, you can make a fresh start and get your finances back on track.