Filing For Bankruptcy As A Teacher

Just like anybody, teachers can find themselves facing overwhelming debt. This could be due to unpaid credit cards, medical expenses or other unexpected situations. In some cases, bankruptcy may be your best legal option. When filing for bankruptcy as a teacher, there are some important factors to consider. Let’s find out more.
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Will Filing For Bankruptcy Affect My Teaching Job?

By law, a school teacher cannot be fired simply because they filed for bankruptcy. This applies to private and government teaching jobs. Your employer may become aware of your debt situation – for example, if creditors begin garnishing your wages. However, this does not give your employer a legal reason to fire you. If you have had performance problems or trouble making it to work on time, you may be fired for these reasons. If you have been fired shortly after your employer found out about your bankruptcy, you may have a legitimate reason to file an illegal discrimination lawsuit.
For those looking for a teaching job, especially with a private employer, be aware that a credit check may be requested. If so, a past bankruptcy will show up on the report, and this could affect your chances of getting hired. You are not legally required to agree to a credit check, but it may affect your job application.

How Bankruptcy Is The Same For Teachers

Just like any other individual, a teacher has certain rights under the law when facing a financial crisis. Filing for bankruptcy means that your debts are wiped clean through a legal process. This might include selling some of your assets, as in Chapter 7 bankruptcy. In Chapter 13 bankruptcy, you arrange to pay back part of your debt through a payment plan.

How Bankruptcy Is Different For Teachers

In general, Chapter 7 bankruptcy is not as strict as Chapter 13. However, to qualify for Chapter 7, you must pass the means test. The means test takes into account income and expenses to determine qualification for Chapter 7.
For many teachers, their salary is paid over 9-10 months, rather than throughout the calendar year.  In these cases, it may be best to wait until fall to file. The means test includes the last six month income in the calculation, so by filing in the fall any non-paid summer months would be included in the calculation.  A lower income would increase the likelihood of qualifying for Chapter 7.
If you can’t wait until the fall to file, and end up failing the means test, ask an attorney to help you appeal the decision based on your total annual salary.

Conclusion

Bankruptcy is a legal process that helps you to get free of debt. For teachers, it pays to fully understand how filing times may affect your situation. A good bankruptcy lawyer can help guide you.
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