How Will the Bankruptcy Affect Me?

I am Filing Bankruptcy: Will I Lose My Job?

No employer may fire you because you filed bankruptcy. In addition, an employer cannot discriminate against you in other terms and conditions of employment; reducing salary, demoting you, or taking away responsibilities because of a bankruptcy. However, if there are other valid reasons for taking these actions, then the bankruptcy will not protect you. Simply put, if an employer wants to take action against you, they can as long as there are other valid reasons such as incompetence, tardiness, or dishonesty.

How does my Employer Find out About the Bankruptcy?

Typically if you are filing a Chapter 7, your employer rarely finds out. However, if you have been sued and are having your wages garnished, your employer is notified. The bankruptcy stops that garnishment, so again your employer is notified in order to stop the garnishment. If you file a Chapter 13, your employer typically will receive notice. In a Chapter 13 plan it is likely that the Judge will order that your Chapter 13 plan payments be deducted from your paychecks and sent directly to the trustee. In order to accomplish this, your employer or at least the payroll department is notified of how much money to withhold and where to send the funds.

Do I have to do a wage order for my Chapter 13?

The simple answer is that is depends. You may not like the idea of the wage order, however the order will make the plan easier to complete. The success rates of Chapter 13 cases is higher where the Debtor has a wage order for their Chapter 13 plan payments over Debtors who pay the trustee themselves. The very obvious explanation is that it is hard to spend money that you never see meaning that if you employer is deducting the payment from your check and mailing it directly to the trustee then you are not tempted to use a portion of the money for other purposes.

Can Bankruptcy Effect Child Custody?

There is no reported evidence of a parent losing custody because of a bankruptcy. Bankruptcy and divorce are so often related these days that one often times follows the other. Family law and bankruptcy are being to overlap in many ways requiring bankruptcy attorneys and Judges to know more about family law and vice versa.  However, keep in mind that bankruptcy does NOT relieve you of child support or alimony obligations.