Bankruptcy is a legal procedure offered to people whose debts are overwhelming, and who will not be able to resolve them without intervention from the legal system. It can be a lifesaving option for people with no hope of pulling themselves out of the hole of indebtedness they have found themselves in. Bankruptcy is never an easy decision, and has ramifications that can follow someone throughout their lives. For example, it will be reported on a person’s credit report for up to ten years, and that can make it very difficult for a person to get a loan, such as a mortgage or car loan, during that time.

Bankruptcy is a complex and difficult decision, but there are supports built into the law for anyone who finds that bankruptcy is their only option. Although credit may be difficult to come by, it is illegal for others to discriminate against anyone just because they have filed bankruptcy in the past. Such discrimination has happened in the past, and made it nearly impossible for people to take advantage of their new beginning.

But federal law clearly states that nobody can be denied or evicted from public housing, denied employment, or denied a driver’s license just because they have taken bankruptcy. Nobody can be fired or have licenses or certifications revoked just because they have filed bankruptcy or are in bankruptcy proceedings. And nobody is allowed to treat someone unequally or deny promotions based on a bankruptcy filing.

These laws are in place to protect the intent of bankruptcy laws in the first place. The idea is to give a debtor a fresh start, to help them stand not in a financial hole, but on level ground as far as debt and finances are concerned. This can’t happen if a person is not able to get a job, is in danger of being fired, or will never be considered for a promotion.

There is sometimes a prejudice against those who have filed bankruptcy that says that they must be immoral, irresponsible, or looking for a free ride. The bankruptcy system is as open to abuse any other, but these preconceptions are largely false. Most people end up in bankruptcy because of circumstances outside of their control, such as job loss, medical bills, death, or family break up. Bankruptcy helps people get back on their feet, and returns them to their status as productive, bill-paying citizens. Nobody should be penalized for that.

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