What You Need to Know About Bankruptcy, Your Employer, and Future Job Opportunities

Background Checks and Credit Reports

Depending on your employer, background checks may involve criminal history checks, drug testing, or your credit history. Generally, the extent of these background checks will depend on the industry you work in. In banking, government, security, and retail institutions, clean criminal and credit records are usually required. However, credit report checking has become more common among all employers as it gives them more information about your financial responsibilities; this includes any mortgage payments, credit debt, delinquencies, liens, judgments, or bankruptcies you might have. Many employers equate credit problems with character deficiencies-not fair, perhaps, but a fact you have to deal with.

With a personal bankruptcy on your credit report, you still have a good chance of securing a job. For example, despite your past bankruptcy, you can clean up the items that appear on your credit report. However, if you still have spotty credit, own several accounts with delinquencies, or have excessive credit card debt, these are definite negative factors employers will consider. By law, bankruptcy in itself cannot be a reason for disqualification or discrimination during the job application process. It may also be worth your time, to pull your own credit history beforehand to know what shows up in your report. With personal bankruptcy filings such as a Chapter 13 and Chapter 7 lasting 7 to 10 years on your credit history, you may have to deal with this issue for quite some time.

Honesty Is Always the Best Policy

In all situations, the best policy is to be honest. You may use your discretion to decide whether to mention the bankruptcy upfront, or let the credit report speak for itself. In either case, remember to be honest. While a bankruptcy or poor credit history won't immediately disqualify you, lying or misrepresenting yourself fraudulently are actions that will kiss your chances goodbye. Depending on the type of employment, some may appreciate it if you are completely upfront about any troubled financial history from the very start. People know that bad things can happen to good people, and you may just be better off explaining your situation instead of appearing as someone trying to hide it.

Limitations and Protections

If you have a bankruptcy in your past, there are bankruptcy laws that are in place to protect you. Section 525 of the U.S. Bankruptcy Code specifically prohibits discrimination based solely on bankruptcy when considering applicants. There are legitimate concerns when it comes to financial, government, and other job industries. But, if you feel that bankruptcy is the sole reason you are being denied, remember you do have the protection of this law on your side. If this is the case, you are always entitled to contact the FTC, state attorney general, or legal aid. However, you may find it more helpful and beneficial to contact the employer and find out why you were not chosen and how you might be able to correct that issue.

Turning a New Leaf

Bankruptcy is a serious situation and it can easily affect so many aspects of your life. It is in your best interest to be honest and focus on improving your current credit history. While a bankruptcy certainly isn't favorable, employers will be concerned as to how the bankruptcy affects your current situation. If they can see it was a single occurrence and you have since managed to pick up the pieces, there is no reason why you can't be as competitive as other applicants.

Source:
U.S. Code Collection . Section 525 Bankruptcy Discrimination

About the Author:
Heindrick So works for a Bay Area Real Estate company that specializes in residential wholesale lending. His work experience is comprised mostly of sales and marketing background which included a high end media sales position at Magnolia Hi-fi. Heindrick is also in his final year of pursuing his Bachelor's Degree in Electrical Engineering at San Jose State University.