Can I face discrimination for filing for bankruptcy?

On Behalf of | Sep 12, 2014 | Personal Bankruptcy |

Many Tennessee residents face financial challenges due to job loss, disability, medical bills and unexpected expenses. Although they may do their best to pay their expenses, sometimes they simply cannot get ahead and instead drown in overwhelming debt. Their only option may be to seek debt relief through bankruptcy. Although bankruptcy offers many benefits and is becoming a more popular option among consumers, there is still a stigma attached to it. In addition, many consumers may fear that they will face discrimination for filing for bankruptcy. Is this a valid fear?

Federal bankruptcy protection laws became enforced in 1971. A Supreme Court case made it unlawful to deny someone a driver’s license due to a judgment discharged in bankruptcy. This law soon expanded to other government agencies as well as private employers. Federal law now makes it illegal to discriminate against someone based on the fact that they filed for bankruptcy, have unpaid judgments or discharged these judgments during bankruptcy. This means that a person cannot be terminated from his or her job due to a bankruptcy. In addition, a company cannot refuse to hire a candidate based solely on the fact that he or she has filed for bankruptcy.

Government agencies are not allowed to deny or revoke a person’s driver’s license or professional license due to bankruptcy. The government also cannot refuse to issue a grant or place any conditions on it based on a person’s prior bankruptcy filing.

Despite these laws, bankruptcy discrimination can still happen. Those who feel they have lost out on employment opportunities and other privileges due to their financial situation may wish to get more information about their options.

Source: FindLaw, “Bankruptcy and Discrimination,” accessed Sept. 7, 2014


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