A common conern I hear from time-to-time is if someone goes bankrupt will they be able to find a job or get a job. The answer will surprise you.
According to Christine Saah Nazer, of the U.S. Equal Employment Opportunity Commission, “The use of credit histories in employment can have a disparate impact on a range of people, including people of color, women and people with disabilities. Many experts say that credit history is a poor predictor of job performance, and that credit reports are often filled with errors, and thus aren’t reliable sources of information about an employee’s financial history.”
And she’s right, there is no correlation between credit reports and job performance. In fact if we look at how employers report they use credit reports the results are not as daunting as people fear.
But Let’s Look at the Facts About Finding a Job After Bankruptcy
A survey of employers found that 85% of the time they looked to make sure the candidate was a good fit and that was the most important employment factor. And 82% of the time they wanted to make sure the person had previous work experience that related to the open job.
Only 9% of the time did employers look to make sure the applicant had good credit or used that as the sole hiring decision.
When something did appear on a credit report, like bankruptcy, 87% of employers said it was not a factor or they would ask about the circumstances that led up to the bankruptcy so they could understand what happened.
If you’re contemplating filing bankruptcy and want to know more about how it might impact your ability to get a job, just click here and talk to a local bankruptcy attorney and get the facts. The consultation with the bankruptcy attorney is free.
As you can see, the common misconception is that bankruptcy will prevent you from getting a job all together, and that’s just not true. Your credit is a lesser factor than you might think and you are better off getting comfortable explaining what happened and let any future employer know why you found yourself in that situation. They will most likely understand.
If you’d like to learn more about this, see Credit Reports, Credit History, and Credit Scores in Hiring and Job Performance. Is It Even Fair?
Update May 29, 2013
As of today, ten states, California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont and Washington have enacted legislation to restrict an employer’s ability to use credit information for employment purposes.