Credit and Bankruptcy / Unemployment - Job Loss

Credit Checks, Bankruptcy And Employment

If you’re applying for a job in finance, accounting or a position that requires the handling of cash, expensive merchandise or a security clearance, you may be subjected to a credit check. If you’re behind on your bills, have delinquencies, defaults, judgments or liens, there a few things you should know.

While a company is restricted from not hiring you simply because you filed bankruptcy, they may be allowed to deny you employment if you have bad credit.  However, if they were challenged in a court, they would need to prove that your poor credit demonstrated that you would not be able to properly perform you duties.

Before you begin your job search, order all three of your credit reports. Remember, you are entitled to one free credit report a year.  Once you receive your credit report, review it closely. If the credit report reveals blemishes such as delinquencies and defaults, you need to develop an explanation for potential employers. Even if you have an old bankruptcy, it may be wise to be prepared to explain why you filed for bankruptcy and/or why you have blemishes on your credit such as late payments.  Keep your explanation simple and clear.  Example: “I filed bankruptcy because of my divorce” or “I lost my home to foreclosure because an illness to forced me to quit work.”

If an employer informs you that they are not hiring you simply because you filed bankruptcy, file a complaint with the EEOC and call the US Federal Trade Commission’s Consumer Response Center at 1-877-382-4357. You can also contact your local consumer protection agency or your state attorney general.