Can an employer "punish" a worker for bankruptcy?

The relationship between financial challenges and a Mississippi resident's work situation is often very close. If a person loses their job, their urgency in finding debt relief is bound to increase tremendously. If someone is being hounded by creditors, that person may be concerned that creditors will start tracking them down on the job. If a person files for bankruptcy, they may wonder what effect, if any, their decision will have on their employment situation.

Fortunately, filing personal bankruptcy should not have an adverse effect on a person's job. The law expressly forbids employers - both private and government - from discriminating against workers solely because they are debtors. For instance, an employer can't fire someone simply because they have filed for Chapter 7 or Chapter 13 bankruptcy. In addition, an employer is not allowed to terminate a worker due to that worker not paying a debt that was discharged under their bankruptcy terms.

The law also prohibits discrimination related to hiring, as well as workers renewing occupational licenses. Employers in the private sector cannot legally discriminate regarding employment if the discrimination is due only to the worker's having filed bankruptcy. Finally, employers cannot discriminate due solely to the insolvent status of a worker during a bankruptcy case.

Despite the protections built into the law, there are still instances where someone who has already declared bankruptcy may still need help. Bankruptcy is a process with many steps that must be taken in proper sequence and according to a specific timeline. By getting the right information, a debtor can move forward either under the protections of the law or in accordance with the law.

Source:, "Bankruptcy basics," accessed Sept. 21, 2014

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