Can a Bankruptcy on a Credit Report Hurt Your Chances of Employment?

Can bankruptcy hurt your chances of finding another professional job? The answer to this question is as complicated as bankruptcy laws.

A bankruptcy, by law, can be reported and posted in all of your credit agency reports for up to 10 years. This information is public information. Anyone wishing to pay for the services of credit reporting agency can view the records.

Employers who specialize in the handling of money, like banks and accounting firms, might run a credit check on you to see if you are the type who can handle money. A bankruptcy found on your credit report may possibly influence the potential employer in whether or not they will hire you. If this is the case, the answer to the employment question could be a definite yes.

On the other hand, under Title 11 of the United States Code, section 525, the law prohibits discriminatory treatment of debtors by both governmental units and private employers.

An excerpt taken from sub-section (a) of the code states this in relation to a governmental unit: “a governmental unit may not…deny employment to, terminate the employment of, or discriminate with respect to employment against, a person that is or has been a debtor under this title or a bankrupt or a debtor under the Bankruptcy Act…”

An excerpt taken from sub-section (b) of the code states this in relation to private employment: “No private employer may terminate the employment of, or discriminate with respect to employment against, an individual who is or has been a debtor under this title, a debtor or bankrupt under the Bankruptcy Act…”

So theoretically, a bankruptcy should not be able to hurt your chances for employment, but unfortunately sometimes, discrimination is hard to prove in a court of law.

For instance, although the law is explicit in regards to government and employer practices concerning discrimination, when it comes to private businesses like a bank, they can discriminate against you if you have filed for bankruptcy protection and want credit. In other words, they will most likely not give you a loan when they find out you have filed a bankruptcy, and if they do provide you a loan, the loan will surely have a much higher interest rate they have attached to the loan in a very discriminating way.

In the same light, an employer who is seeking a professional with certain skills might use the information from a credit report about a bankruptcy to determine you do not have the skills necessary for the job. So, is that discrimination? Only a court can decide.

If you feel like you have been discriminated against because you have a bankruptcy on your record, you might want to contact a lawyer.

If you are looking for bankruptcy help, you should know bankruptcy laws are complicated, and it might be wise to consult with a bankruptcy lawyer who can help you understand how the laws might apply in your particular situation.

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