Discrimination From Bankruptcy

The Bankruptcy Code Section 525(b) does not allow an employer (government or private) from discriminating (hiring, terminating, promoting) an individual solely for filing bankruptcy.

Landlords are not allowed to terminate an individual’s lease if s/he files bankruptcy in New York. If a New Yorker is looking for an apartment after filing bankruptcy, the renter should explain the reasons for filing bankruptcy to the landlord. The individual can earn trust by suggesting to the landlord the bankruptcy debtor is willing to pay a higher security deposit or to pay one month advance rent to get an apartment.

These are other prohibited discrimination against someone filing bankruptcy:

• Refusal to issue a New York driver’s license
• Refusal to provide college transcripts
• Termination of New York or federal public benefits
• Eviction from New York public housing
• Deny participation in New York or federal government contracts

After filing bankruptcy, a debtor should keep tabs on the credit file. A credit file gives the complete credit report and indicates the sources of information it has. It exhibits what institutions have received a file within the past year. Negative details can be kept in the credit report for up to seven years. A debtor can challenge incorrect and outdated entries on a report. Since the credit bureau must investigate challenges within thirty days, if it does not have the resources to do so, it must, as required by law, remove a negative entry.

The individual filing bankrupt should not feel guilty or submit to retaliation or intimidation when someone finds out about the bankruptcy. Everyday businesses, even law firms that go after debtors, file bankruptcy without personal emotions. For example, according to an article “Mann Bracken, Debt-Collecting Law Firm Extraordinaire, To Shut Down” on January 20, 2010 by Nathan Koppel of The Wall Street Journal, Mann Bracken, one of the largest debt-collection firms that filed collections claims against debtors all the country, including many debtors unable to pay their credit card bills, closed its doors in 2009. The firm closed 24 offices across the US, and shut it offices due to financial distress.

Mann Bracken merged with Wolfproff and Abramson in 2008, and did not have a welcome reception with consumers. The firm used demand letters, telephone tactics, and lawsuits to get money for creditors. Often times the firm called on special appearance attorneys to appear at orders to show cause, collections trials, and arbitrations. The firm was placed into receivership and had its assets liquidated. Receivership is an alternative to bankruptcy. Receivership occurs when a court appoints a receiver to run an enterprise.

There is no shame to filing bankruptcy in New York if this is the road to financial health. Contact an experienced New York bankruptcy attorney today to learn bankruptcy options.