A lot of clients pursuing wrongful termination, harassment, discrimination or other employment law claims have questions about the impact of bankruptcy on such claims. Bankruptcy can impact an employment claim if not handled properly by the bankruptcy attorney. The key to ensure that a bankruptcy does not negatively impact an employment lawsuit is to report actual and even potential claims when filing and to update the bankruptcy filings when necessary. Above all, disclose your bankruptcy filings to your employment attorney.
In a recent example of what not to do, a case in Los Angeles handled by another firm worked on a wrongful termination case for over three years. On the day before trial, the opposing side discovered the client had not reported the potential claim in a prior bankruptcy matter. The client lost the right to pursue the case and the trustee has to decide whether to pursue the lawsuit. Failing to report the claim can, and often does, result in the client losing the right to pursue the case. Always discuss prior, current or pending bankruptcy filings with your Los Angeles employment lawyer.