Bankruptcy Law / Filing Bankruptcy

Can Others Discriminate Against Me Because I Filed Bankruptcy?

Many debtors considering bankruptcy are afraid that they will miss out on opportunities due to discrimination against them.  It’s important that debtors understand that it is illegal to discriminate against anyone who has sought relief under the bankruptcy code.  A matter of fact, there is a specific section of the bankruptcy code that addresses the illegality of discriminating against bankruptcy debtors.  In section 11USC§525 of the bankruptcy code, the laws says:

  1. That a private employer may not fire an employee or discriminate against an employee because he/she has filed bankruptcy.
  1. That the government cannot deny a debtor a guaranteed student loan or grant because they have filed bankruptcy.
  1. A prospective employee also cannot be denied a job simply because he/she filed bankruptcy.

Any company or government entity that discriminates against a debtor because they have filed bankruptcy is in violation of the law.  But the truth of the matter is that debtors who file bankruptcy rarely if ever face discrimination.  Bankruptcy has become an ordinary and accepted practice in our society, because most people understand that sometimes a debtor simply can no longer pay their debts and must file bankruptcy to receive relief.