People sometimes worry that businesses, government agencies, landlords, or employers will discriminate against them if they file bankruptcy. Whether that can happen depends upon the nature of the business or entity.
Government agencies are prohibited from discriminating against you because you filed a bankruptcy. You cannot be denied or evicted from public housing simply because you filed bankruptcy. Social security, public assistance benefits, veteran’s benefits, and other benefit payments from federal, state, or local governments cannot be denied or terminated because of a bankruptcy filing.
You cannot be denied licenses issued by the government because you filed bankruptcy. Bankruptcy cannot be used as a reason to exclude you from participation in government-funded programs or to deny you the opportunity to bid on a government contract or to be hired for government employment. State universities and public schools cannot deny you enrollment or withhold transcripts because of a bankruptcy.
The government must treat a discharge of a debt you owe to the government as if the debt had been fully paid. If, for instance, your driver’s license was suspended because of an unpaid debt that was discharged in bankruptcy, your license must be reinstated after a discharge of that debt if full payment of the debt would entitle you to reinstatement.
As a general rule, no private business is required to do business with you, whether or not you filed bankruptcy. Your filing of a bankruptcy does not impose any duty on a business to accept you as a customer, and businesses can take your bankruptcy into account when they decide whether to serve you in the future. If, for instance, you discharged your debt to a medical clinic in a bankruptcy, the clinic can decide not to provide medical services to you in the future. Similarly, credit card companies can decide not to extend credit to you after you file a bankruptcy.
Private landlords often run a credit check of prospective tenants to determine whether the tenants are likely to pay their rent. Your bankruptcy will probably appear on your credit report. A private landlord is entitled to deny your rental application for that reason.
If a landlord informs you that a credit check is part of the application process, it is usually best to tell the landlord about your bankruptcy and to explain that you are able to pay your rent because you are no longer burdened by other debt. You might also want to remind the landlord that you cannot file another bankruptcy for a period of years, so the landlord does not need to worry that delinquent rent payments will be discharged in a new bankruptcy. You can also offer to have your lease co-signed by a friend or relative with good credit.
Whether you have government or private employment, you cannot be fired, demoted, or given a reduction in pay or responsibilities because you filed bankruptcy. If you are applying for a job, bankruptcy cannot be used as a reason for government employers to deny you employment. Private employers cannot use it as the sole reason to deny you employment.
Bankruptcy is complex and many answers depend upon your specific situation. If you still have questions you can schedule a free consultation with a bankruptcy attorney.