Will you be Discriminated Against if You File Bankruptcy?
I have filed bankruptcy cases for teachers, accountants, certified financial planners, bank employees, auditors, comptrollers and attorneys. None of these clients have ever lost their professional licenses or employment because they filed for bankruptcy.
Section 525 of the Bankruptcy Code protects individuals against discriminatory treatment.The Bankruptcy Code itself protects individuals against discriminatory treatment. Under Section 525 of the Bankruptcy Code, "no private employer may terminate the employment or discriminate against an individual who has been a debtor under the Bankruptcy Code." Furthermore, the Bankruptcy Code protects against discriminatory treatment for individuals seeking student loans as well. Section 525 of the Bankruptcy Code prohibits "any governmental unit or financial institution from denying a student loan guaranty to any person who has been a debtor under the Bankruptcy Code."
Will my employer be notified of my bankruptcy?Most clients ask, "Will my employer be notified of my bankruptcy?" The answer is absolutely not. The only parties notified of your bankruptcy filing are the parties we choose to notify. The Bankruptcy Court itself does not notify creditors. It is the debtor and her attorney who notify the creditors of the bankruptcy filing. I will only notify an employer, or its Human Resources Department, in order to stop a garnishment of my client's wages once a bankruptcy case is filed, and then only upon the request of my client.
License renewals or accreditations for teachers, accountants, Financial Planners, attorneys or doctors.I have filed bankruptcy cases for teachers, accountants, certified financial planners, bank employees, auditors, comptrollers and attorneys. None of these clients have ever lost their professional licenses or employment because they filed for bankruptcy. In fact, license renewals or accreditations for teachers, accountants, attorneys or doctors do not even ask questions regarding bankruptcy or financial solvency. Stockbrokers, private bankers, certified financial planners and other individuals who are licensed to sell financial products are required each year to fill out a Form U-4, which asks, "Within the past 10 years, have you made a compromise with creditors or filed a bankruptcy petition?" My clients in these fields have filled out their Form U-4's for ten years disclosing their bankruptcy filing without experiencing any repercussions whatsoever. It is the non-disclosure of the bankruptcy, not the actual bankruptcy filing itself, that exposes an individual to a suspension or revocation of license due to "willful failure to disclose material facts" on their Form U-4. Nonetheless, individuals who work for banks and financial institutions should always check with their Human Resources department to determine whether filing for bankruptcy (or even being insolvent or accumulating excessive debt) violates the terms of their employment. These financial institutions cannot discriminate against you for merely making an inquiry. Remember, banks employ tens of thousands of employees worldwide, of which 90% never have access to financial accounts of their clients and are, therefore, exempt from any bankruptcy rules regarding their employment.
Common Myths"I cannot file bankruptcy because I will lose my license as a certified financial planner, investment banker, comptroller, financial auditor, accountant, attorney. . . ." False "Will my boss find out that I filed for bankruptcy? Will the Bankruptcy Court notify my job? Can I be fired for filing for bankruptcy?" No "Will I or my children be denied student loans if I file a bankruptcy?" No Of the hundreds of bankruptcy cases I have filed in the last fifteen years, I have never once seen a client fired because she filed for bankruptcy.