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Can employers discriminate against employees based on bankruptcy?

Many people who are feeling overwhelmed by their debt are reluctant to get the legal help they need because they fear the stigma associated with bankruptcy. This can be a mistake, and is largely based on a misconception.

It's true that filing for bankruptcy protection can hurt your credit score. If you file for Chapter 7, it will stay on your credit report for 10 years. A filing for Chapter 13 will stay on your credit report for seven years. However, filing for bankruptcy gives you a new start to begin rebuilding your credit score.

With proper guidance from a debt relief professional, you can return to good credit and borrow money for a mortgage or other purposes. Secured credit cards and credit building loans can help you get there.

It's also important to know that federal law prohibits certain kinds of discrimination against people who have filed for bankruptcy. For example, both government and private employers cannot terminate or otherwise take discriminatory employment actions against an employee simply because the employee has filed for bankruptcy protection. Government agencies can't deny, revoke, suspend or decline to renew a license, franchise or similar privilege. The same protections attach to people associated with people who have filed for bankruptcy protection, such as a spouse or other family members.

U.S. bankruptcy law aims to resolve disputes between debtors and creditors in a way that gives people a chance to return to financial health. Filing for personal bankruptcy is the ending to a problem and the beginning of a new chapter. With help from a debt relief attorney, people can regain control over their finances and rebuild their lives.

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