The Bonding Process While in a Chapter 13 Bankruptcy

A question by a debtor recently arose on a bankruptcy forum website. The debtor was applying for a job that required him to go through the bonding process in order to get the job. He was in the middle of a Chapter 13 bankruptcy and wanted to know if his bankruptcy would cause him problems in getting bonded.

Universal Insurance company Limited

Bonds are normally provide by insurance companies.

The Bonding Process is Designed to Protect a Company Financially

The primary reason a person is asked to go through the bonding process for a company is so the company is financially protected against theft of money related to their business activities. During the bonding process, a bonding insurance company will take an application for the employee wanting to be bonded and do a criminal background check on the individual. If the potential employee has a clean criminal record, the insurance company issues a bond up to a certain amount of money the business wants the bonding company to insure. The bonding company is simply saying that they will stand behind the employee up to the amount insured in case the employee should steal up to the amount of money insured. The business pays a premium for the service.

Usually, bookkeepers, bank tellers, cashiers, and the like are required to be bonded when they go to work for a company. They are the ones who normally handle money in a business. Some businesses also bond employees who are are privy to inside information when it comes to trade marks. A business which loses its trademark can lose money in the long run. There are a variety of other reasons to bond an individual seeking employment.

Bankruptcy Law Should Protect Debtor During Bonding Process

Having to file for bankruptcy protection is not a crime. As a matter of fact, it is your right as guaranteed by the Constitution. Bankruptcy law should protect the debtor during the bonding process. Bonding companies during the bonding process are looking for anything that might be potentially criminal. Although a bankruptcy can show up on your records, the insurance company should not be looking for a bankruptcy in their consideration of bonding you.

Under the USC Title 11, Section 525, bankruptcy law deals with employee and employer relations when it comes to filing for bankruptcy protection. Simply stated, an employer cannot discriminate against an employee or future employee because you have filed a bankruptcy, in the process of a bankruptcy, or about to file a bankruptcy.

There are rare cases that an employer might not hire you because you have a bankruptcy on your record. For the most part, these cases involve high level sensitive security positions, normally a government position, where the nature of what you might do for your employer could be compromised because of a bankruptcy. These situations are rare and are handled by law on a case by case basis.

If you are in doubt about the bonding process and a Chapter 13 bankruptcy, contact a bankruptcy lawyer. They can help you work through your particular work situation while protecting your right to bankruptcy.

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