Filing for bankruptcy can provide a path toward addressing overwhelming debt, but many people worry about how the decision could affect their careers. One common concern is whether a current or prospective employer can discover a bankruptcy filing.

If you are considering bankruptcy in Raleigh, North Carolina, it is important to understand that bankruptcy cases generally become part of the public record. However, federal law also provides important employment protections related to bankruptcy.

Are Bankruptcy Filings Public Records in North Carolina?

Yes. Bankruptcy is handled through the federal court system, and bankruptcy filings are generally public records. The U.S. Courts explains that bankruptcy case records can be accessed through the courthouse or electronically through the Public Access to Court Electronic Records system, commonly known as PACER.

For Raleigh-area residents filing in the Eastern District of North Carolina, the bankruptcy court also provides access to case and docket information through PACER.

This means an employer could potentially discover that you filed for bankruptcy. However, employers are not automatically notified of every bankruptcy filing simply because they employ the person who filed.

How Could an Employer Learn About a Bankruptcy?

Because bankruptcy records are publicly accessible, an employer could potentially search for a filing. PACER allows users to locate federal bankruptcy cases and access docket information.

An employer may also learn about a bankruptcy in other circumstances. For example, certain employment screening processes may involve reviewing financial information when permitted by applicable law. Additionally, a Chapter 13 case can sometimes involve payroll-related arrangements depending on how payments are administered.

The circumstances surrounding each bankruptcy are different, so Raleigh residents who are concerned about workplace privacy should discuss their specific situation with a bankruptcy attorney.

Can a Private Employer Fire You Because You Filed for Bankruptcy?

Federal bankruptcy law provides significant protections for employees. Under 11 U.S.C. § 525(b), a private employer may not terminate an employee or discriminate with respect to employment against that individual solely because the person filed bankruptcy, was insolvent before or during the bankruptcy process, or failed to pay certain debts that were discharged or dischargeable in bankruptcy.

The word “solely” is important. Section 525 does not prevent employers from making legitimate employment decisions based on other lawful reasons. Questions about whether a particular workplace action amounts to bankruptcy discrimination can therefore depend heavily on the specific facts.

What About Government Employment?

Federal bankruptcy law provides protections involving governmental employers as well. Under 11 U.S.C. § 525(a), a governmental unit generally may not deny employment, terminate employment, or discriminate with respect to employment solely because an individual is or has been a bankruptcy debtor, was insolvent during the periods specified by the statute, or did not pay certain dischargeable or discharged debts.

These protections are intended to prevent a bankruptcy filing by itself from becoming an automatic barrier to certain employment opportunities.

Will Your Employer Automatically Be Told About Your Bankruptcy?

Generally, filing bankruptcy does not mean that the bankruptcy court automatically sends a notice to your employer simply because of the employment relationship. Nevertheless, because bankruptcy filings are public records, employers can potentially discover them.

There may also be circumstances in which employment or payroll information becomes relevant to administering a bankruptcy case. Anyone concerned about confidentiality should raise those concerns with their bankruptcy attorney before filing.

Should You Avoid Bankruptcy Because of Your Job?

Concerns about employment are understandable, but they should be considered alongside the potential financial benefits and consequences of bankruptcy. Chapter 7 and Chapter 13 bankruptcy can provide different forms of debt relief, and the appropriate option depends on factors such as income, assets, debts, and financial objectives.

Understanding what information becomes public and what protections federal bankruptcy law provides can help you make a more informed decision.

Speak With a Raleigh, North Carolina Bankruptcy Attorney

If you are considering filing for bankruptcy in Raleigh, NC, you may have questions about your job, privacy, credit, property, and financial future. Getting answers before filing can help you understand what to expect throughout the bankruptcy process.

At Law Office Of Calvin Craig, we provide legal assistance to individuals in Raleigh and surrounding North Carolina communities who are dealing with bankruptcy and debt-related concerns. Contact our office to discuss your circumstances and learn more about your available bankruptcy options.