Free Consultation
The office is open as per the NYS Covid-19 guidelines. We are now doing both in-person and telephone consultations. Please call the office at 718-855-6840 to schedule a time to speak with one of our experienced bankruptcy attorneys.

Employers Can’t Discriminate Against Bankruptcy Debtors

The issue of military security clearance for New York bankruptcy debtors came up recently. It’s one of the many situations in which bankruptcy can give workers anxiety. This post will try to further assuage those anxieties by discussing a few ways the law protects workers who file bankruptcy, particularly those employed with governmental units.

To begin with, Section 525(a) of the Bankruptcy Code states that governments cannot:

  • “Deny, revoke, suspend, or refuse to renew a license, permit, charter, franchise, or other similar grant to, condition such a grant to, discriminate with respect to such a grant” against a bankruptcy debtor. This is a broad statute that’s designed to protect all government contractors who are in or have exited bankruptcy.
  • Section 525(a) forbids the government from denying or terminating an employee on the basis of a bankruptcy filing. The same goes for merely discriminating against an employee who has filed bankruptcy.
  • The law even protects associates of people who have filed bankruptcy.

Section 525(b) affects how private-sector firms treat bankruptcy debtors. They also may not terminate or discriminate against people who have filed bankruptcy. However, in a subtle difference with the subsection (a), private-sector firms are allowed to choose not to hire people on the basis of a bankruptcy filing.

Another important point shared by both subsections is that neither government nor private employers is allowed to discriminate against a former debtor for not paying a debt that was discharged. Part of that point is to protect the spirit of the Bankruptcy Code’s goal, which is to provide debtors with a fresh start. However, the more mundane reason is to protect former debtors who might owe money to an employer (or someone the employer likes). This particular point protects workers from discrimination, retaliatory firings, or demands for payment in exchange for work from employers whom debtors owe money to.

If you filed bankruptcy and your employer is taking a hostile action against you, the Bankruptcy Code is on your side, and an experienced bankruptcy lawyer can help you keep your job, your duties, and your paycheck if your employer violates Section 525.

For answers to more questions about employment while in bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced Brooklyn bankruptcy attorney Bruce Weiner for a free initial consultation.

Rosenberg, Musso & Weiner, L.L.P
26 Court St # 2211
Brooklyn, NY 11242, USA
718-855-6840
http://nybankruptcy.net/

Recent Posts

Seven Tips for Paying Down Credit Card Debt and Raising Credit Scores

File under non-bankruptcy options: What are some ways to pay down those credit card debts, stay out of New York bankruptcy, and possibly raise your credit score? Here are some answers: (1)  Obtain your credit report. By federal law, you’re entitled to up to three free credit reports from the three credit reporting bureaus for

Read More »

What Are the Benefits of a 100 Percent Chapter 13 Repayment Plan?

One might think that the answer to that question is “nothing,” but that’s not true. It is sometimes worthwhile for debtors to file chapter 13 New York bankruptcy intending to pay their creditors in full even if the discharge isn’t really necessary—a filing referred to as a 100 percent repayment plan. Obviously it doesn’t happen

Read More »

Chapter 13 ‘Step Plans’ Can Help Debtors Accommodate Life Events

Debtors considering chapter 13 New York bankruptcy sometimes wonder how to craft their repayment plans when they anticipate significant events that are nearly certain to reduce or increase their incomes. For example, sometimes debtors know that a pregnant spouse will not be working for the beginning portion of the repayment plan but will be able

Read More »

Chapter 13 ‘Step Plans’ Can Help Debtors Accommodate Life Events

Debtors considering chapter 13 New York bankruptcy sometimes wonder how to craft their repayment plans when they anticipate significant events that are nearly certain to reduce or increase their incomes. For example, sometimes debtors know that a pregnant spouse will not be working for the beginning portion of the repayment plan but will be able

Read More »

Chapter 13 ‘Step Plans’ Can Help Debtors Accommodate Life Events

Debtors considering chapter 13 New York bankruptcy sometimes wonder how to craft their repayment plans when they anticipate significant events that are nearly certain to reduce or increase their incomes. For example, sometimes debtors know that a pregnant spouse will not be working for the beginning portion of the repayment plan but will be able

Read More »

Chapter 13 ‘Step Plans’ Can Help Debtors Accommodate Life Events

Debtors considering chapter 13 New York bankruptcy sometimes wonder how to craft their repayment plans when they anticipate significant events that are nearly certain to reduce or increase their incomes. For example, sometimes debtors know that a pregnant spouse will not be working for the beginning portion of the repayment plan but will be able

Read More »
Scroll to Top