Can I Get Fired For Filing Bankruptcy?

The Impact of Bankruptcy on Your Employment: Debunking Myths

The term ‘bankruptcy’ often evokes fear and concern, particularly about its potential impact on job security. One common question that arises is: Can I get fired for filing bankruptcy?

The answer is more nuanced than a simple yes or no. Let’s delve deeper.

Introduction: Bankruptcy and Employment

The legislation surrounding bankruptcy is designed to provide individuals with a fresh start, shielding them from insurmountable debt while preserving their standard of living. However, does this protection extend to employment?

The Bankruptcy and Insolvency Act states that no agreement with a bankrupt person can be terminated or amended solely due to bankruptcy. However, it doesn’t necessarily safeguard you from termination if your employment contract includes clauses for dismissal or restriction of duties in the event of bankruptcy.

In most cases, employers are indifferent to an employee’s bankruptcy status. In fact, if you’re receiving collection calls at work, your employer might even motivate you to file for bankruptcy to cease the calls and focus on your job.

Consumer Proposal: A Bankruptcy Alternative

A consumer proposal is an alternative to bankruptcy that can provide some additional safeguards for your employment. Specifically, the law states that your employment cannot be terminated solely on the grounds of filing a consumer proposal.

Job Restrictions Post-Bankruptcy

While bankruptcy doesn’t typically lead to job termination, it can impose specific restrictions on the kind of work you’re allowed to do.

Trust Accounts

If your job involves handling trust accounts (e.g., lawyers, real estate agents, bankruptcy trustees), you cannot manage these accounts while you’re bankrupt. You’ll need to delegate this responsibility to someone else or consider filing a consumer proposal instead.


Bondability refers to your employer’s insurance against potential financial loss. This is typical in jobs where you handle cash or assets on behalf of someone else (e.g., bank jobs, government roles). Before filing for bankruptcy, you should check with your employer about the possible impact on your bondability.

Professional Standards

Certain professional bodies may have specific standards that could result in the loss of your license to practice in the event of bankruptcy. This is particularly relevant for accountants, insurance agents, and members of other professional bodies.

The professional body or licensing board you belong to can give you information about the potential impact on your license and when it could be reinstated post-bankruptcy. In some cases, this might be immediate, while in others, it may not occur until you’re discharged from bankruptcy. Again, filing a consumer proposal would not affect individuals in this line of work.

If you are worried about any of these restrictions, it is advisable to discuss this with your trustee before filing for bankruptcy. They can provide guidance based on previous similar cases they have encountered.


The fear of losing employment often makes people hesitant about filing for bankruptcy. While it’s true that bankruptcy might impose certain restrictions, it does not automatically result in job termination.

Remember, the primary aim of bankruptcy law is to give individuals a fresh start by freeing them from overwhelming debt while maintaining a reasonable standard of living. If you’re contemplating bankruptcy, consult with a professional to understand all the implications, including those on your job, and explore alternatives like consumer proposals.


“Bankruptcy is not the end, but a new beginning.”


This quote sums up the essence of bankruptcy – a chance to start afresh, clear of debt, and with the opportunity to rebuild your financial health. So, when you’re worried and ask yourself, “Can I get fired for filing bankruptcy?” remember, the answer is typically ‘no.’ However, you should always seek professional advice tailored to your unique circumstances.

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