What are the Benefits of Filing for Bankruptcy?

Key Takeaways

• Filing triggers the automatic stay immediately, halting collection, lawsuits, and garnishment.
• No private employer may fire you or demote you for filing.
• Government employers cannot even refuse to hire you over a past bankruptcy.
• Private employers may still decline to hire, and the discrimination must be solely about the bankruptcy.

If you are debating whether filing for bankruptcy is right for you, you are likely wondering about the benefits of this process. To learn more about the benefits of filing for bankruptcy and the reasons people take the plunge to file, continue reading. For assistance with any bankruptcy matters, do not hesitate to give our experienced Rockland County bankruptcy attorney a call. Our legal team has years of experience assisting clients like yourself. Give our firm a call today to learn more about our services and how we can help. Here are some questions you may have about the bankruptcy process ahead:

What are the Benefits of Filing for Bankruptcy?

Though there is often a stigma surrounding bankruptcy, there are many benefits to filing for bankruptcy, and the benefits may vary depending on the circumstances. One of the most common reasons people choose to file for bankruptcy is to stop a foreclosure on their home.

When you file, the automatic stay takes effect immediately, meaning creditors must stop all collection activities.

Through the automatic stay, threatening calls, emails, and letters from collection agencies will cease. Bankruptcy will stop all debt lawsuits from creditors until the case is resolved. If an individual’s wages are being garnished, bankruptcy can put an end to this. Filing for bankruptcy can discharge a significant amount of debt. Bankruptcy allows individuals to work out a repayment plan that will allow them to get their finances in order. Finally, bankruptcy gives individuals a fresh start.

Your Job Is Protected, Whatever You May Have Read

For many individuals considering bankruptcy, one of the primary concerns is that it will cost you your job. However, you should note that federal law does address this directly, rather than leaving it to chance.

Your Current Employer Cannot Fire You for Filing Bankruptcy

No private employer can terminate your employment or discriminate against you in the course of your employment because you filed for bankruptcy, were insolvent, or failed to pay a debt that was discharged.

This protection applies to demotions, pay cuts, and reassignments, not solely dismissal. Additionally, it applies to you and to anyone associated with you, so a spouse working at the same company is also covered.

Government Employers Are Held to a Higher Standard

If you work for a federal, state, or local government body, the protection is broader still. A governmental unit cannot refuse to hire you, cannot terminate you, and cannot discriminate against you in employment on the basis of a bankruptcy. It also cannot revoke or refuse to renew a license or permit for that reason.

The One Gap, and Where New York Sits

The provision for private employers does cover termination and discrimination, but it does not cover refusal to hire. In fact, most federal appeals courts have held that omission to be deliberate, determining that a private company does reserve the right to decline to hire an applicant due to a past bankruptcy.

It is also worth noting that a federal court in the Southern District of New York, which covers Rockland County, reached the opposite conclusion, though other circuits have declined to follow it. In all cases, the discrimination has to be solely based on bankruptcy, which is what makes these claims difficult to prove.

Should I Hire an Attorney?

When filing for bankruptcy, it is beneficial to retain the services of a Rockland County bankruptcy attorney. Having an attorney on your side who understands the details of bankruptcy law will give you a significant leg up. Your attorney will know how to deal with collection agencies, creditors, and all other entities you will encounter throughout this process. Our bankruptcy firm is prepared to assist you when you are ready. We have helped countless individuals like yourself and are prepared to take on your case today. Give our firm a call to schedule your initial consultation to learn more about our services and experience. We are looking forward to hearing from you.

Contact Our New York Bankruptcy Firm Today

Bankruptcy, for many people, is a frightening endeavor. Fortunately, with the help of an experienced attorney, it does not have to be. If you require the services of an experienced Business Law or Bankruptcy attorney, contact the Law Offices of Allen A. Kolber, Esq. today to schedule a consultation and discuss your options. We will have your back every step of the way.