Bankruptcy Discrimination
Pursuant to Bankruptcy Code section 525(a) a Governmental unit “may not deny, revoke, suspend, or refuse to renew a license, permit, charter, franchise, or other similar grant to, conditions 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 the Bankruptcy Act, or who was insolvent before or during such a case.
Under this bankruptcy code section a person can protect their rights if they are denied or terminated from employment on the basis of having filed a bankruptcy case.
A person cannot be discriminated against solely on the basis of being a bankrupt before the starting of the case under this title. A job application cannot be denied solely on the basis of the applicant having filed a bankruptcy case.
11 U.S.C. sec. 525(b) states that “No 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, a debtor or bankrupt under the Bankruptcy Act, or an individual associated with such debtor or bankrupt.”
The above code section states that a private employer unit cannot decline a job application or terminate you from their organization solely due to filing of a bankruptcy. If your spouse or family member has filed bankruptcy then the employer cannot terminate your job contact on the basis of your association with a bankrupt.
A person can qualify for discrimination protection under following non-exclusive situations:
1) A person has under gone a bankruptcy proceeding
2) A person has become a penniless, either before filing for bankruptcy or while the petition was pending, or
3) A person did not pay a dischargeable debt.
11 U.S.C. sec. 525(c) states that a government unit or a person whoever is engaged in operating a student’s loan program cannot deny loan or loan insurance to a person who has been a debtor under this title or a bankrupt or debtor under the Bankruptcy Act. A person’s loan application cannot be rejected on alleged reason of his association with a debtor or a bankrupt.
Therefore, in addition to protection against employment discrimination, filing bankruptcy should not prevent you from obtaining student loans in the future.
Why bankruptcy protection is crucial
People going through financial doldrums often file for bankruptcy in order to acquire financial freedom. The main motive to file bankruptcy is to have a fresh start by giving new opportunity to the filers. The section 525 protection against discrimination helps ensure that people going through a bankruptcy process can retain their jobs and therefore avoid incurring further debts.
Discriminatory claim
In order to avail oneself of the protection against the above-referenced discriminatory treatment you need to have enough evidence against the alleged employer. You need to prove that your bankruptcy status is the only cause for your termination or employer declining your job application. In other words, one must prove they were terminated or denied employment based solely due to a bankruptcy filing, insolvency or failure to pay a debt. If you have been a victim of unlawful bankruptcy discrimination you may be compensated for it and possibly recover damages for emotional distress.
To maximize your ability to remedy an unjust discrimination protected by bankruptcy code section 525, be sure to maintain a record of your performance track that would help in your evaluation process in order to invalidate any other reasons shown by the employer for the negative employment action.
Author Bio :
This is a guest post by Kevin Craig who is a financial writer for Oak View Law Group. He has helped lot of debt burdened people with free counseling and advices on many finance related topics.
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