Will my employer find out if I file for bankruptcy?

2010-09-02   minute read

Bradley Milne


Hello, If you file for bankruptcy, the Trustee does not automatically contact your employer to advise of the proceeding. That being said, under certain circumstances it is possible that your employer would find out about the bankruptcy. For example, if your wages are being garnished by a creditor, the Trustee must contact your organization's payroll department to advise of the bankruptcy and related stay of proceedings so as to get the garnishment stopped. In certain occupations or professions, you may also have an obligation to report your financial situation to your employer and/or professional body. If the bankruptcy has been filed as an "Ordinary Administration" (i.e. where realization on assets is expected to exceed $15,000), a meeting of creditors must be called and notice of this meeting is advertised in the newspaper. In this case, it is possible that your employer could see the ad. However, most consumer bankruptcies are "Summary Administrations" (i.e. where realization on assets is expected to be less than $15,000). In this most common type of bankruptcy, a meeting of creditors is unlikely to occur and there is no advertisement required. As such, your bankruptcy may not be widely known. In summary, many people have filed for bankruptcy without their employer knowing, however, there may be circumstances under which this is not possible. Usually it does not happen but there is no guarantee that your employer will not find out. 

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