Can I be fired by my employer for filing bankruptcy?

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UPDATED: Jul 14, 2021

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Written By: Jeffrey JohnsonUPDATED: Jul 14, 2021Fact Checked

The United States has many laws governing the conditions of employment, including at will employment. These laws are designed to protect both employers and employees across the country. One of these laws strictly prohibits an employer from terminating an employee based solely on the fact that the employee has filed for bankruptcy.

While the law does prohibit your employer from firing you just for filing for bankruptcy, there are also “at-will” laws in place in every state in the United States. These at will employment laws allow an employer to fire someone for any reason or no reason at all, as long as the employer doesn’t terminate the employee for an illegal reason.

So, while bankruptcy may be an improper reason to fire someone, your employer could potentially take action and fire you and simply claim that the bankruptcy had nothing to do with it and that he was firing you for unrelated reasons. You may file a lawsuit against your employer for wrongful termination if this happens. However, if your employer is able to make a convincing case that he fired you for any reason other than filing for bankruptcy you will most likely lose.

This means the best thing you can do is keep careful records. If you have been getting excellent performance reviews and you continue to do well and don’t change your work patterns at all, then you can try to use this as evidence that your boss terminated you for an improper reason. Witnesses can also be helpful, as can any other evidence you may have that proves that your boss actually fired you because you went bankrupt. 

If you find yourself in this situation and feel that your employment was terminated wrongfully because of your bankruptcy, you should consult a qualified legal representative who can assist you in assessing your case and gathering the evidence you will need in a wrongful termination lawsuit against your employer.

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Written by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

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