Bankruptcy and Job Loss in Arizona

bankruptcy and job lossA lot of misconceptions exist about what happens when filing bankruptcy in the state of Arizona. The facts seem to get misconstrued like playing a game of telephone. Everyone makes mistakes financially at some point in their life. The important thing is to learn from these mistakes and move forward. Something like bankruptcy is one of those mistakes that should not and cannot be held against anyone.

Job Termination Protection

Employers cannot terminate you for filing bankruptcy. The law prohibits companies that are government or private from firing you from your position due to financial hardship. The protection may not expand to a new job you are applying for, and it only fully protects you in your current job situation.

Under the law, no employer can solely terminate employment based on:

  • You have filed for bankruptcy
  • You were in debt before you received a discharge in a bankruptcy
  • You have not paid debts which were discharged in a bankruptcy or will be discharged in a bankruptcy that is pending

The non-filing spouse (if they are not filing with you jointly) are also under the umbrella of job protection. The law provides this protection explicitly to extend to those who are associated with someone who has or is filing bankruptcy.

Fine Print to Protection

The point of the protection is to stop an employer from terminating you based on only the basis that you filed for bankruptcy. However, this protection will not cover you from being terminated for other reasons. The law states the termination reason would have to be solely based on the bankruptcy. If not, everyone is laid off or terminated, and you are chosen on the grounds of bankruptcy, which is prohibited.

The law also prohibits an employer from discriminating against being denied a promotion based on the fact that you have had or are going through a bankruptcy. This also means that an employer cannot demote you from a position or cut your salary based on this either.

Click here for an article on bankruptcy and unemployment.

Refuse to Hire

Just like the laws protecting you from being terminated for filing bankruptcy, it is illegal for a government employer to refuse to hire you based on bankruptcy status. This protection also extends to those who are associated with you. They cannot be denied government employment because you filed for bankruptcy.

These restrictions do not bound a private employer. If you apply for a job with a private employer, they can deny your employment based on bankruptcy. This is different than if they already employed you. If you already have the job, they cannot fire you, but if you are trying to get the job, they can deny you.

Protecting Your Rights

If you feel as though you have been discriminated against in the workplace for your bankruptcy status, you may need to find an Arizona bankruptcy attorney that is skilled in handling these types of discrimination cases. If you feel that your employer has fired, demoted, or denied you a job based on your prior or current bankruptcy status, legal help could be a call away.

Find out what is a bankruptcy trustee in Arizona?