What is Chapter 7 Bankruptcy?

Chapter 7 is a type of bankruptcy that provides debtors with an efficient manner of discharging and permanently eliminating certain debts. Not everyone is eligible to file for Chapter 7 bankruptcy. An individual with primarily consumer debt may potentially meet the criteria for Chapter 7 if their monthly income from the past six months is less than the California median or if their income is above the median, but qualified deductions bring that income beneath the disposable income threshold.

When you file for Chapter 7 bankruptcy, all unsecured debts will be eliminated forever. Credit collection calls will cease, and your debts will be gone. It may take one to two months after your initial petition for bankruptcy is filed for your Chapter 7 case to be resolved.

If you are considering filing for bankruptcy, Chapter 7 may be the right legal option for you.

Debts that may be eliminated by filing for Chapter 7 include:

  • Credit card debt.
  • Medical bill debt.
  • The majority of legal judgments against you.
  • Payday loans.
  • Utility bill debt.
  • Personal loans.
  • And other unsecured debts.

Not all types of debts can be erased by filing for Chapter 7 bankruptcy. Most taxes, spousal support, child support, and student loans will not be discharged or eliminated by filing for Chapter 7.

To ensure that Chapter 7 is the proper course of action for you and your case, it is highly recommended that you first speak with lawyers experienced in bankruptcy law. Our law firm has extensive experience in bankruptcy law and helping individuals prepare for Chapter 7. We would be proud to represent your legal interests as you pursue a satisfactory outcome to your case. To learn more about our legal services, please contact our California law offices today.

Can Filing for Bankruptcy Have an Impact on Your Career?

If you have recently filed for bankruptcy or are considering filing, you may naturally be concerned about whether Chapter 7 bankruptcy can have a negative impact on your employment and your career in the future.

Bankruptcy law forbids discrimination. No employer may terminate your employment simply because you filed for Chapter 7. However, potential future employers may take your past bankruptcies into consideration.

The bankruptcy was created to provide a debtor with a clean slate and a second chance. The bankruptcy was not designed to punish those who were forced to use it. Still, it is worth it to be informed about the possible ramifications of filing for bankruptcy.

Can You Lose Your Current Job if You File for Chapter 7 Bankruptcy?

You cannot lose your job simply because you filed for bankruptcy.

The Bankruptcy Code specifically says that neither government employers nor private company employers can fire an individual because they have filed for bankruptcy. Nor can you be fired for being insolvent before filing a bankruptcy case.

If your employer threatens your job or fires you because you turned to bankruptcy, they have broken the law, and you may seek legal action for wrongful termination.

Is it Harder to Get a New Job After You’ve Filed for Bankruptcy?

Future employers may learn about your bankruptcy case by conducting a thorough background check. However, whether that discovery affects your employment or not is another matter entirely.

Government employers (federal, state, and local) are prohibited by law from discriminating against employees or future employees because of any past or present bankruptcy. This means that job applicants seeking employment with a government entity need not worry about their bankruptcy history impacting their prospects of getting a job.

In most states across the country, private-sector employers are not as constrained when it comes to evaluating new job applicants. If a private sector employer finds something in a background check or credit score check that they don’t like the looks of, this may impact their decision of whether or not to hire an applicant.

In California, the law prohibits employers from holding consumer credit reports against new job applicants for employment purposes unless the job falls under a specific exception. Most of these exceptions have to do with professions wherein employees have access to large sums of money.

What Types of Professions Are Impacted by Bankruptcy?

Employment after bankruptcy is possible, especially if you are seeking employment in government-related positions. However, certain professions and industries may be stricter about hiring new job applicants who have a history of bankruptcy or poor credit scores.

These include:

  • Jobs in law enforcement.
  • Jobs in financial institutions.
  • Jobs that require security clearance.

Can Employers Learn You Filed for Bankruptcy?

In some cases, your employer might learn that you have filed for Chapter 7.

If you owe your employer money in any way, once you file for bankruptcy, your employer will be listed in the bankruptcy filing, and they will get a notice. Additionally, if a creditor is garnishing your wages, your employer will receive orders telling them to stop withholding money for the creditor.

In most other situations, it is unlikely for your employers to learn of your bankruptcy filing unless you divulge that information personally. That said, you are not required to inform your employer, and very few people will go through the time to read court records unless they have an express purpose to do so.

Will Bankruptcy Stay on Your Credit Report Forever?

Filing for Chapter 7 bankruptcy can stay on your credit report for up to a decade. By comparison, chapter 13 bankruptcy filings stay on your credit reports for seven years. Once that time has passed, employers will not see your bankruptcy case listed in your credit report.

Contact Us for an In-Depth Case Evaluation

Filing for bankruptcy is a big decision that should not be taken lightly. Those considering bankruptcy are recommended to seek out professional legal assistance from experienced bankruptcy law attorneys. Our law firm has extensive experience in the practice area of bankruptcy law, and we would be proud to lend legal guidance to you throughout the whole process.

Many clients expressed concern about the impact and influence of a bankruptcy case on their present and future employment. Thankfully, in most cases, the majority of individuals should have nothing to worry about. That said, it is still worth taking the time to seek legal help from lawyers who know the subject.

Contact us for a confidential consultation today. (714) 701-6356.