Bankruptcy has benefits, but it also has consequences. You could discharge many kinds of debt through Chapter 7 bankruptcy. However, you might have trouble getting good credit for the next decade depending on what kinds of loans you try to obtain. That’s because a bankruptcy stays on your credit report for up to 10 years. In today’s blog from Groce & DeArmon, we answer, “Can bankruptcy prevent you from getting a job?”
Related Post: When To Seek Legal Aid For Potential Bankruptcy
Employers & Credit Reports
Potential employers can request a credit report from candidates. They must ask permission to obtain a report, and you must give them permission in writing. Companies in the private sector (non-government entities) can refuse to hire you if you don’t consent to having a credit check.
Federal, state, or local government agencies cannot consider your bankruptcy when deciding to hire you. This is even true if you need a security clearance to obtain a government position. One thing to note is that government jobs often have greater areas of scrutiny compared to civilian jobs. Groce & DeArmon can explain what effect, if any, filing for bankruptcy can have on your job prospects.
Reasons for Credit Checks at Employers
As many as 16% of employers run credit checks on all candidates, while nearly one-third do credit checks on some candidates. (According to a survey from HR.com.)
Circumstances vary, but the main reason employers run credit checks on candidates is that there’s some kind of financial aspect to the person’s job duties. Banks, accounting firms, payroll firms, retail stores with cash drawers, restaurants, security firms, and similar companies may require a pre-employment credit check. The reason for these checks is because firms want to protect their employees and customers.
High-level positions, such as executives and company officers, may also require a credit check. Groce & DeArmon can counsel you about what to expect when an employer runs a credit check on you for future employment.
What Companies Cannot Do
Private companies cannot discriminate against you because of your credit check if you’re already on the payroll. If you’re worried about the negative effects of a bankruptcy filing with your employer or potential employer, being upfront and honest with HR might outweigh any concerns the company may have with your financial situation.
A credit check is just one factor that should be considered for a job. If credit information is used against you in the employment process, the employer must explain so in writing, giving a detailed explanation of where they obtained the information. If you have any questions about this process, you can also consult with a bankruptcy attorney like the ones at Groce & DeArmon.
Firms cannot fire you, demote you, or change your job duties due to your bankruptcy if you’re already hired. Again, talking to your employer might be the best course of action here. Everyone goes through trying times, and explaining your situation can alleviate some of the concerns.
Related Post: Pros and Cons of Filing for Chapter 7 Bankruptcy
Talk to Groce & DeArmon for Bankruptcy Protection
Worried about what effect bankruptcy may have on your future career prospects? The bankruptcy attorneys at Groce & DeArmon can advise you on how to handle this situation. Contact Groce & DeArmon or call toll-free 1-800-640-3706 for more information or a free consultation about filing for bankruptcy and its effects.