Is this legal?

My friend works for a credit card company, but her overall finances has led her to file for bankruptcy. One of her creditors is her employer. She says that when her employer finds out about the bankruptcy, they will fire her because of the bad debt with them.

This really is a friend's situation, not me, because I'm currently looking for work.

What if there was good credit up until only recently? She isn't irresponsible with her credit. All her creditors have a long history with her as a good credit customer. Some medical emergencies came up with a family member whose job doesn't give insurance. That person is 24 & considered independent by law, so they can't be covered by my friend. Anyway, it got to be either pay her credit cards or pay for healthcare of that person.

So, it isn't right to assume someone is immature or has bad character because they become a bad credit risk. What if it happened to you. Some employers are snobs.

Also, yes individuals (not just businesses) can file for bankruptcy.

Your friend cannot be fired for filing bankruptcy. She's protected by the Bankruptcy Act/United States Code. The employer is regarded as any other creditor and can ask for repayment from the debtor's attorney, not from the employee.
If she's fired for not reaffirming the debt, the employer can be sued for discrimination violation under Section 525 of the U.S. Code.

I do not think they can for that, I bet they will mess with her, but it is not legal for that. have her ask the question with her attorney.

a person can not file for a bankruptcy. only a business can.

she works at the convenience of the employer, she can be terminated for any reason or no reason at all. Being a bad credit risk reflects badly on her maturity, and judgment!

Yes, they can, and it's perfectly legal. I work at a bank and we have had employees fired for delinquent loans and excessive overdrafts.

If she gets fired it is because of her overall credit and it's legal. Financial companies tend not to keep employees who would have reasons to commit embezzlement or other financial crimes using their position.

YES, if the employer wants to terminate her employment for this reason, they can absolutely do so. This is because legally there have been cases in the past where people who are desperate for money who had access to the credit accounts of others have charged off their debt on the companies customers in fairly small amounts (i.e. a vague $20 charge from a shell company set up by the employee on larger accounts -- say a monthly bill of $10,000 that may appear to be an expense account). If the employer feels that there is even a remote chance that they could be liable for something like this, they have a pretty good incentive to terminate the employee and have fairly solid grounds for doing so.

Actually, the fact that your friend had always had good credit before this incidence would make her situation even worse, because it could be argued that this would give her an even larger (though still miniscule) incentive to try to reclaim her credit.

Federal bankruptcy law prevents an employer taking adverse action just because someone filed for protection under the bankruptcy code. The credit card company is normally an unsecured creditor and will have to come under the jurisdiction of the Federal Bankrutcy Court. Why does your friend think she will be fired? I am sure there is no clause that says a person filing bankruptcy will be fired from the company. Your friend needs a good bankruptcy lawyer and discuss the situation with them.

Good Luck to you and your friend

To answer your question yes it is legal, is it right no.Since most likely she signed something before she started work they may be able to fire her.
Did she talk to someone in HR before she filed? Some of my past employers are willing to work with you as long as you let them know whats going on a head of time. The reasons she was forced to file don't seem to be mismangement of her money but an insurence problem. If she had gone to someone before she got into hard time they could have helped. She could have taken a hardship withdrawl from any retirement she had or some of my past companys had programs were co-workers donate money to help other co-workers out when they have hard times. Since I don't think she decided to file overnight she may have had other options had she talked to her company.

I wouldn't put it past a company to try it. But it would have to be in the employment agreement, even then I am not sure that is legal. I would contact a lawyer. In fact I recommend this service for $17/mo (my state) I can call and ask all sorts of questions and talk until I am satisfied with my answer. A ton of other benefits also. I have had this service for almost 2 years and would not be without it. Check it out at: