Will filing bankruptcy impact my government employment?

Section 525 of the Bankruptcy Code addresses government employment discrimination. In this section, entitled Protection Against Discriminatory Treatment, it is clearly stated that employment decisions cannot be affected by the fact that a person has a current bankruptcy case or has filed for bankruptcy in the past. However, if you are planning to file for bankruptcy, you should be aware that your employment may be affected.

A federal case found that section 525 does not define employment decisions based on future cases as discriminatory treatment. The wording of the section is very specific as to the protections that are offered and the situations in which they are offered. The court found that there was a blatant omission of regard for people who were planning to file or who were employed and later filed. This omission, the court determined, meant that the law was not meant to provide protection for these individuals. As a result, government employers have a legal foundation to protect them if they use the filing of bankruptcy for employment decisions.   

This matter should not be oversimplified however. If you have concerns about bankruptcy and government employment, these can be best answered by an experienced lawyer who can assess your individual circumstances.