No agency at any level of government can discriminate against you based on your bankruptcy filing by denying, canceling, suspending, and refusing to renew a license, permission, charter, franchise, or even another similar concession.
While the legislation does shield debtors from some potentially disastrous outcomes, it does not eliminate them. If you apply for a governmental loan or a line of credit, the lender may take your bankruptcy into account.
An Orlando workers compensation Attorney explains that the government is banned from using your bankruptcy as an excuse according to this provision of the Bankruptcy Law. This includes the following actions:
- refuse to hire you or even dismiss you
- refuse your governmental assistance or end it abruptly
- Remove you from subsidized housing and force you to find alternative accommodations
- suspend or revoke your state liquor license
- conceal your academic record
- refuse to issue you a license, or
- refuse to provide you with a contract for something like a building project.
You also have the right to participate in federally backed student loan programs without fear of discrimination from your lender.
If you’ve paid off a debt to the government, all legal action taken against you because of that obligation must halt once the debt is discharged. If, for instance, you were denied a license because you couldn’t pay a court judgment related to an auto accident that you eventually settled out of court, you would be entitled to a new one once the debt was dismissed. You may not be able to drive legally again until you comply with the insurance and bonding requirements mandated by your state’s financial obligation statute. However, if the judgment was not released, you could still face license suspension till you settle the debt.
Just remember that bankruptcy-related rejections from private entities are not banned, only those from the government. You may be turned down for a loan, fired from your job, or kicked out of your residence for unrelated reasons to your bankruptcy. The government may decide you are not creditworthy enough at this time to receive a loan from the Small Business Administration, for example, for a variety of reasons.
Implicit Discrimination By Private Organizations
Whether or not a private organization can treat you differently because you’ve filed for bankruptcy is situationally dependent.
If You File For Bankruptcy, Your Private Employer Cannot Fire You
No private sector employer has the legal right to fire you or treat you differently just because you’ve filed for bankruptcy. The law makes it obvious that your company cannot fire you, but it is unclear whether they can refuse to hire visitors because you filed for bankruptcy. One recent appeals court, for instance, ruled that employers can still discriminate against applicants based on bankruptcy status.
Why Third Parties Might Want You to File for Bankruptcy
Unfortunately, not all forms of prejudice in the business world are outlawed. The only thing you can do if a landlord refuses the rent to you because of bankruptcy is to demonstrate to them that you would be a reliable renter and pay your bills on time. Prepaying rent a few months in advance or, if allowed by your state’s rules, providing a larger security deposit are both options that can help you secure a rental unit. (However, a landlord cannot cite a tenant’s bankruptcy during the lease period as cause for early eviction.)
You might be out of luck if a private company turns you down for a job because of your poor credit history but not because you’ve gone bankrupt.
There are two courts you can go to if you’ve been treated unfairly because you filed for bankruptcy: state court and bankruptcy court. An attorney’s services are highly recommended.