{"id":286954,"date":"2016-04-04T10:41:53","date_gmt":"2016-04-04T15:41:53","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/bankruptcy\/what-is-bankruptcy\/bankruptcy-and-discrimination.html"},"modified":"2023-12-12T15:35:40","modified_gmt":"2023-12-12T20:35:40","slug":"bankruptcy-and-discrimination","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/bankruptcy\/what-is-bankruptcy\/bankruptcy-and-discrimination.html","title":{"rendered":"Bankruptcy and Discrimination"},"content":{"rendered":"\n<div class=\"wp-container-core-columns-is-layout-9d6595d7 fl-sectionWithSidebar fl-container fl-flex fl-flex-wrap fl-gap30\">\n    \n    <div class=\"fl-page-articles fl-section-main fl-section-main-full-width\">\n        <h1 class=\"fl-no-margin-top\">Bankruptcy and Discrimination<\/h1>\n<section class=\"fl-gutenberg-byline\">\n    <div class=\"fl-gutenberg-byline-content\">\n                    By <a href=\"https:\/\/www.findlaw.com\/company\/our-team.html\">FindLaw Staff<\/a> | Legally reviewed by <a\n                href=\"https:\/\/www.findlaw.com\/company\/our-team\/bridget-molitor-jd\/\">Bridget Molitor, JD<\/a>\n                | Last reviewed\n        <time>\n                            December 12, 2023\n                    <\/time>\n    <\/div>\n\n    \n    <details class=\"fl-gutenberg-byline-toggle fl-gutenberg-byline-legally-reviewed\">\n        <summary>\n            <i class=\"fl-gutenberg-byline-icon\" aria-hidden=\"true\"><\/i>\n            Legally Reviewed\n        <\/summary>\n\n        <div class=\"fl-gutenberg-byline-toggle-content\">\n            <p><em>This article has been written and reviewed for legal accuracy, clarity, and style by <a href=\"https:\/\/www.findlaw.com\/company\/our-team.html\">FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with <a href=\"https:\/\/www.findlaw.com\/company\/company-history\/editorial-policy.html\">our editorial standards<\/a>.<\/em><\/p>\n\n        <\/div>\n    <\/details>\n\n    <details class=\"fl-gutenberg-byline-toggle fl-gutenberg-byline-fast-checked\">\n        <summary>\n            <i class=\"fl-gutenberg-byline-icon\" aria-hidden=\"true\"><\/i>\n            Fact-Checked\n        <\/summary>\n\n        <div class=\"fl-gutenberg-byline-toggle-content\">\n            <p><em>The last updated date refers to the last time this article was reviewed by FindLaw or one of our <a href=\"https:\/\/www.findlaw.com\/company\/our-team\/contributing-authors.html\">contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please <a href=\"https:\/\/lawyers.findlaw.com\/?fli=bylinelink\" target=\"_blank\" rel=\"noopener\">contact an attorney in your area<\/a>.<\/em><\/p>\n\n        <\/div>\n    <\/details>\n<\/section>\n<p>Federal law forbids the government, government agencies, and private employers from discriminatory treatment against people in debt. Although an employer may discover your bankruptcy from a credit check or credit report, they&nbsp;<a href=\"https:\/\/www.findlaw.com\/employment\/employment-discrimination.html\">cannot discriminate against you<\/a>&nbsp;because of it.<\/p>\r\n<p>It is illegal for private employers and the government to discriminate against anyone who:<\/p>\r\n<ul>\r\n<li>Was or is a debtor<\/li>\r\n<li>Was or is unable to pay debts before or during a bankruptcy case<\/li>\r\n<li>Has not paid a debt discharged through bankruptcy<\/li>\r\n<\/ul>\r\n<p>Keep reading to learn more about bankruptcy and discrimination.<\/p>\r\n<h2>History of Bankruptcy Discrimination<\/h2>\r\n<p>The U.S. Constitution allows the federal government to set bankruptcy laws and administer&nbsp;<a href=\"https:\/\/www.findlaw.com\/bankruptcy\/what-is-bankruptcy\/bankruptcy-an-overview.html\">bankruptcy proceedings<\/a>. Accordingly, bankruptcy proceedings occur in federal bankruptcy courts, and bankruptcy law tends to be uniform across all 50 states. This means that bankruptcy law is a national matter. It can come up before the U.S. Supreme Court and U.S. Courts of Appeals.<\/p>\r\n<p>Federal laws against bankruptcy discrimination came about in 1971. That year, the U.S. Supreme Court decided a case called&nbsp;<a href=\"https:\/\/caselaw.findlaw.com\/us-supreme-court\/402\/637.html\" target=\"_blank\" rel=\"noopener\"><i>Perez v. Campbell<\/i><\/a>. Perez argued that a state can&#8217;t deny a person a driver&#8217;s license because of an unpaid court judgment that had been discharged in bankruptcy. Perez won the case.<\/p>\r\n<p>The ruling in&nbsp;<i>Perez v. Campbell<\/i>&nbsp;prompted Congress to pass&nbsp;<a href=\"https:\/\/codes.findlaw.com\/us\/title-11-bankruptcy\/11-usc-sect-525.html\" target=\"_blank\" rel=\"noopener\">11 U.S.C. Section 525<\/a>. This law is a more general ban against government and private employer discrimination based on bankruptcy.<\/p>\r\n<h2>Government Discrimination During Bankruptcy<\/h2>\r\n<p>There are federal bankruptcy nondiscrimination laws that protect you. These laws prohibit the following forms of government discrimination against bankruptcy debtors:<\/p>\r\n<ul>\r\n<li>Firing a debtor due to the debtor&#8217;s bankruptcy<\/li>\r\n<li>Discriminating when hiring<\/li>\r\n<li>Denying, suspending, canceling, revoking, or declining any licenses, franchises, or other privileges because of the bankruptcy<\/li>\r\n<li>Denying a government grant because of the bankruptcy<\/li>\r\n<\/ul>\r\n<p>Under the same provision of the United States Code, neither the government nor private employers may discriminate against anyone associated with a debtor in bankruptcy with respect to employment. This protection for associates of a bankruptcy debtor can potentially extend to business partners and family members.<\/p>\r\n<h2>Can an Employer Fire Someone in Bankruptcy?<\/h2>\r\n<p>No, a&nbsp;<a href=\"https:\/\/www.findlaw.com\/employment\/workplace-privacy\/privacy-in-the-workplace-overview.html\">private employer may not discriminate<\/a>&nbsp;against bankruptcy debtors. The same federal statute that bans governmental discrimination also prohibits private employers from similar forms of&nbsp;<a href=\"https:\/\/codes.findlaw.com\/us\/title-11-bankruptcy\/11-usc-sect-525.html\" target=\"_blank\" rel=\"noopener\">bankruptcy discrimination.<\/a><\/p>\r\n<p>These include bans against:<\/p>\r\n<ul>\r\n<li><a href=\"https:\/\/www.findlaw.com\/employment\/losing-a-job\/wrongful-termination.html\">Firing an employee<\/a>&nbsp;because of their bankruptcy<\/li>\r\n<li><a href=\"https:\/\/www.findlaw.com\/employment\/hiring-process\/legal-rights-during-the-hiring-process.html\">Denial of employment<\/a>&nbsp;because of an applicant&#8217;s bankruptcy<\/li>\r\n<li>Discriminating against a debtor&#8217;s family or friends<\/li>\r\n<\/ul>\r\n<p>This means you can&#8217;t face employment discrimination based on your bankruptcy.<\/p>\r\n<h2>Have You Faced Discrimination Because You Filed for Bankruptcy? Speak With a Bankruptcy Attorney<\/h2>\r\n<p>Did you submit a bankruptcy petition for a Chapter 13 bankruptcy, Chapter 7 bankruptcy, or any other type of bankruptcy?<\/p>\r\n<p>If you think the government or an employer fired you, did not hire you, or otherwise discriminated against you because of your bankruptcy filing, you should consult a local attorney working with<a href=\"https:\/\/lawyers.findlaw.com\/employment-law-employee\/?fli=dcta\" target=\"_blank\" rel=\"noopener\">&nbsp;employment discrimination cases<\/a>.<\/p>\r\n<p>A lawyer familiar with the Bankruptcy Code can give you quality legal advice. Let an attorney explain bankruptcy protections to you and help you work towards a fresh start.<\/p>\r\n<div class=\"was-this-helpful\">\n    <div\n            class=\"was-this-helpful__question-container\"\n            aria-labelledby=\"was-this-helpful__question\"\n            role=\"group\"\n    >\n        <span\n                id=\"was-this-helpful__question\"\n                class=\"was-this-helpful__question fl-text-lg-bold\"\n        >Was this helpful?<\/span>\n        <button\n                class=\"was-this-helpful__button fl-text-sm\"\n                aria-label=\"Yes\"\n                value=\"yes\"\n        >\n            <span class=\"was-this-helpful__button-text fl-text-bold\">Yes<\/span>\n            <i class=\"was-this-helpful__button-icon\">\n                <svg width=\"22\" height=\"22\" viewBox=\"0 0 22 22\" fill=\"none\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\">\n                    <g id=\"thumbs-up\" clip-path=\"url(#clip0_604_3418)\">\n                        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class=\"was-this-helpful__choose-option-message-text\"><\/p>\n        <\/div>\n        <form class=\"was-this-helpful__feedback-form\">\n            <div class=\"was-this-helpful__feedback was-this-helpful__feedback--positive\">\n                <fieldset>\n                    <legend class=\"was-this-helpful__feedback-form-title\" tabindex=\"0\">Why was this helpful?<\/legend>\n                    <div class=\"fl-radio-button-field fl-flex was-this-helpful__feedback-form-title\">\n                        <input\n                                id=\"was-this-helpful__radio-button--understandable\"\n                                class=\"fl-radio-button-field-input\"\n                                type=\"radio\"\n                                name=\"positive-feedback\"\n                                value=\"Easy to understand\"\n                        >\n                        <label\n                                class=\"fl-radio-button-field-label fl-text-sm 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class=\"was-this-helpful__feedback-form-title\" tabindex=\"0\">Why was this not helpful?<\/legend>\n                    <div class=\"was-this-helpful__choose-option-message\" role=\"status\">\n                        <p class=\"was-this-helpful__choose-option-message-text\"><\/p>\n                    <\/div>\n                    <div class=\"fl-radio-button-field fl-flex was-this-helpful__feedback-form-title\">\n                        <input\n                                id=\"was-this-helpful__radio-button--missing-info\"\n                                class=\"fl-radio-button-field-input\"\n                                type=\"radio\"\n                                name=\"negative-feedback\"\n                                value=\"Missing Information\"\n                        >\n                        <label\n                                class=\"fl-radio-button-field-label fl-text-sm was-this-helpful__radio-label\"\n                                for=\"was-this-helpful__radio-button--missing-info\"\n                        >Missing the information I need<\/label>\n                    <\/div>\n                    <div class=\"fl-radio-button-field fl-flex was-this-helpful__feedback-form-title\">\n                        <input\n                                id=\"was-this-helpful__radio-button--complicated\"\n                                class=\"fl-radio-button-field-input\"\n                                type=\"radio\"\n                                name=\"negative-feedback\"\n                                value=\"Too complicated\"\n                        >\n                        <label\n                                class=\"fl-radio-button-field-label fl-text-sm was-this-helpful__radio-label\"\n                                for=\"was-this-helpful__radio-button--complicated\"\n                        >Too complicated \/ too many steps<\/label>\n                    <\/div>\n                    <div 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                      <\/ul>\n<\/div>\n\n\n    <\/div>\n<\/div>","protected":false},"excerpt":{"rendered":"<p>Find out why employers may not discriminate against bankruptcy debtors with the help of FindLaw.<\/p>\n","protected":false},"author":41135,"featured_media":0,"parent":286949,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"app\/Http\/Controllers\/Templates\/ArticleWithBreadcrumbsController.php","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_autodraft_ids":[],"_cloudinary_featured_overwrite":false,"_sb_is_suggestion_mode":false,"_sb_show_suggestion_boards":false,"_sb_show_comment_boards":false,"_sb_suggestion_history":"","_sb_update_block_changes":"","_is_real_time_mode":false,"_realtime_collaborators":"","footnotes":"","cf_checklist_status":[]},"categories":[2727],"tags":[],"state_laws_tags":[],"flmsa":[],"class_list":["post-286954","page","type-page","status-publish","hentry","category-bankruptcy"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.findlaw.com\/law-api\/wp-json\/wp\/v2\/pages\/286954","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.findlaw.com\/law-api\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/www.findlaw.com\/law-api\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/www.findlaw.com\/law-api\/wp-json\/wp\/v2\/users\/41135"}],"replies":[{"embeddable":true,"href":"https:\/\/www.findlaw.com\/law-api\/wp-json\/wp\/v2\/comments?post=286954"}],"version-history":[{"count":0,"href":"https:\/\/www.findlaw.com\/law-api\/wp-json\/wp\/v2\/pages\/286954\/revisions"}],"up":[{"embeddable":true,"href":"https:\/\/www.findlaw.com\/law-api\/wp-json\/wp\/v2\/pages\/286949"}],"wp:attachment":[{"href":"https:\/\/www.findlaw.com\/law-api\/wp-json\/wp\/v2\/media?parent=286954"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.findlaw.com\/law-api\/wp-json\/wp\/v2\/categories?post=286954"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.findlaw.com\/law-api\/wp-json\/wp\/v2\/tags?post=286954"},{"taxonomy":"state_laws_tags","embeddable":true,"href":"https:\/\/www.findlaw.com\/law-api\/wp-json\/wp\/v2\/state_laws_tags?post=286954"},{"taxonomy":"flmsa","embeddable":true,"href":"https:\/\/www.findlaw.com\/law-api\/wp-json\/wp\/v2\/flmsa?post=286954"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}