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Background on bankruptcy with creditors and employment

Tennesseans who are thinking about filing for bankruptcy due to financial challenges will undoubtedly consider the option due to the allure of debt relief and moving forward with his or her life. Whether it is a Chapter 7 bankruptcy, a Chapter 13 bankruptcy or some other chapter, there are certain factors that must be understood even after the case is completed. Two that frequently arise are if the creditor continues trying to collect on a discharged debt after the case has been completed and how a bankruptcy affects employment at a current job.

Creditors are not supposed to try and collect on a discharged debt. If a creditor does try to do this, the debtor has the right to file a motion and report the action requesting that the situation be handled. The court will frequently do this to make certain that there has not be a violation of the discharge. Once a debtor has been granted a discharge, there is a permanent statutory injunction that is meant to stop creditors from acting to collect a debt. That includes a legal filing to collect. The creditor can be sanctioned for a violation. Generally, that will result in a fine for the creditor.

People who have received a discharge will feel better after it is over, but if they believe that the bankruptcy will affect their employment, that relief can turn to concern. There cannot be discrimination against debtors by the public or private employers. Insolvency before or while a case is in progress or a failure to pay a debt that was discharged cannot be the basis of discriminatory treatment at work. The employee cannot be terminated, discriminated against, demoted, or have other privileges violated because of bankruptcy.

While filing for bankruptcy can be helpful in multiple ways, there are likely concerns that a person will have related to the process and its aftermath. If these issues are taking place or there are concerns about them, speaking to an attorney who specializes in bankruptcy can assuage worries and deal with the behaviors.

Source:, "Discharge in Bankruptcy -- Bankruptcy Basics -- What can the debtor do if a creditor...; May an employer terminate...," accessed on Sept. 19, 2017

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Kenneth C. Rannick, P.C.
4416 Brainerd Road
Chattanooga, TN 37411

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