Will My Employer Know That I Filed For Bankruptcy?
If you are filing for bankruptcy, you may be concerned about privacy—especially about keeping your employer from knowing that you filed for bankruptcy. Is there a way to ensure that your employer doesn’t know about your bankruptcy?
When Your Employer Has to Know
As a general rule, there is no obligation to notify your boss or employer that you have filed for bankruptcy. There are only three exceptions to this.
The first is if your boss actually is a creditor—that is, for some reason, you owe your employer money. Your boss would have to be listed as a creditor and notified, even if the boss wasn’t actively collecting on the debt, and even if your boss never expected to be paid back.
The second is if there is a wage garnishment actually being enforced against you, although in that situation, your employer likely already knows that you may be having financial difficulties. The good news is that once you file your bankruptcy, the wage garnishment will immediately cease.
The third scenario involves a chapter 13 repayment plan. If the court orders that your payments be deducted from your paycheck, then of course your employer would know about the bankruptcy. Although from a privacy standpoint this may not be desirable, a wage order does make it easy for you to make your Chapter 13 payments, and ensures that your payments are being made on time.
Unless you are in any of the three situations above, there is no obligation for your employer to know you are filing for bankruptcy. Of course, your employer can still do what anybody can do—look you up on public records.
Retaliation Is Not Allowed
You don’t have to worry about being fired or having any adverse action put against you by your employer because your boss finds out that you filed for bankruptcy. Federal law makes that kind of thing illegal. That applies both to private and government employers.
Adverse action doesn’t just mean firing. It can mean denials of promotions, denials of benefits (such as time off), or giving someone poor job performance evaluations.
For future employment, there is no legal obligation on you to tell future employers about your bankruptcy, although your bankruptcy will show up on a background check, which more and more employers are doing nowadays.
Most employers nowadays don’t care so much whether an employee files for bankruptcy, but how open you want to be about it is up to you, and the impact may of course vary depending on what industry you’re in.
Companies with a lot of employees likely care very little—they probably have loads of employees who have also filed for bankruptcy, and most companies will think nothing of it.