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Ellen
Ellen, Attorney
Category: Bankruptcy Law
Satisfied Customers: 36714
Experience:  Bankruptcy Lawyer. Experienced.
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Does a recent bankruptcy effect future employment; in other

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Does a recent bankruptcy effect future employment; in other words do employers look at it and filter based on a bankruptcy?
*This chat is not intended as legal advice. It is general information that may or may not apply to your situation and should not be relied upon.*

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Yes it sometimes can negatively affect future hiring.

Although the Bankruptcy Code specifically prohibits discrimination in employment based upon a bankruptcy filing, the scope of the protection depends upon whether the employer or potential employer is a private or government employer.

Both the government and a private employer are prohibited from discrimination against a current employee however a private employer may refuse to hire someone based on a prior bankruptcy filing.

11 U.S.C. § 525(a) prohibits government employers and states from discrimination in hiring and discrimination with existing employees. It states that a “governmental unit may not 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, deny employment to, terminate the employment of, or discriminate with respect to employment against, a person that is or has been a debtor under this title….”

11 U.S.C. § 525(b) prohibits private employers from discriminating against current employees but not from discriminating in hiring. Section 525(b) provides that “[n]o private employer may terminate the employment of, or discriminate with respect to employment against, an individual who is or has been a debtor under this title…solely because such debtor or bankrupt…” filed for bankruptcy protection.

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