Bankruptcy Indiana

Whenever a blog reader poses a question that I think might be of interest to many other readers, I will use a blog post to discuss that topic.  This reader asks whether his chances of securing a job will be hurt if it's discovered he filed bankruptcy.

First, it is illegal for a company to refuse to hire someone - or to fire existing employees -  just because they've filed bankruptcy. Employment lawyer Linda Correia of Webster, Fredrickson & Brackshaw in Washington, D.C., says that a statute under the bankruptcy code prohibits discrimination against an individual who is or has been a debtor.

Realistically, though, it's very common for credit checks to be part of the hiring process.  If an employer fails to hire you, it may be difficult to prove that your bankruptcy was the sole reason for that decision. Jobs in the financial services or legal fields have unique rules that may prevent your being hired, but for most other jobs, bankruptcy would not cause an automatic turndown, according to personneltoday.com.

The long and short of it is, as I stated in an earlier blog post (see "Getting Hired After Bankruptcy"), is that finding employment after bankruptcy can be a challenge.  When business owners request information from consumer reporting bureaus about job applicants, the Fair Credit Reporting Act requires that the agencies divulge that information. That's why it's best to be very up front with a prospective employer about the fact you've filed bankruptcy and the factors that led you to make that decision. In today's economic climate, your story will not be uncommon, and, if you have a history of good work performance and the qualifications needed for that job, an employer is likely to consider hiring you.

One special warning I want to issue is that it usually takes a couple of months after a bankruptcy for the credit report to accurately reflect that debts have been discharged.  A prospective employer may be very understanding of your situation given the current economic downturn, but that employer will not want to be bothered with calls and wage garnishments.  You can help your chances by carefully checking your credit report to make sure debts show up as discharged and that if a car was surrendered as part of the bankruptcy that the credit report does not state the car was repossessed.

You deserve every chance to prove yourself in a new job, and while times are tough now in the job market, honesty and perseverance should ultimately pay off.