Not sure about hiring but I just checked my employment agreement (I'm in Oz) and my employer can definitely fire me if I declare bankruptcy:
*the Company may terminate your employment without notice (no payment in lieu of notice will be paid) in any of the following circumstances:
×If you become unable to pay your debts as they become due
×If you are declared bankrupt;
According to the letter of the contract, it sure seems that way.
I went over the contract with the HR team back in the states (I was transferred over to Oz) and they thought these clauses were very strange. Especially considering that Australian workers have much stronger labor rights in practically every other way compared to the US.
I'm Australian but not a lawyer... have heard "unable to pay debts as and when they fall due" as a definition of insolvency, which requires one to declare bankruptcy if directing, say, a limited liability company. The actual act of becoming bankrupt is separate to insolvency, though, so they're probably just trying to cover all bases.
Again, not a lawyer, and only passingly familiar with this stuff, so excuse me if I'm stating the obvious or if it's the same the world over.
I suspect you'll find that clause in your contract is to protect your sponsoring employer from liability in the event that you declare bankruptcy. That is, they cease to be your sponsor and thus absolve themselves of any liability.
