Credit Inquiries for Employment

[Planetary]

My wife who's been unemployed for almost exactly 12 months is very close to being hired for a new sales position. However, the employer asked her to provide a letter from our BK attorney explaining the circumstances behind our Chapter 7 ($100k+ worth of medical bills for child paid for with credit cards) which she had to list on their credit check. My wife is uber-stressed the employer will pass her over because of this. FWIW, we're in California.

Anyone have any tips? Prior experiences?

[SunshineGal]

It sounds like they are looking for verification of extenuating circumstances which caused the bankruptcy. This is most likely a good thing and they want it for their employee file.

[Planetary]

Yeah, the potential emplyer (their HR dept) wants to know the circumstances/reason(s), but they want it from our BK attorney who really bungled our filing and is pretty non responsive. Not to mention, we didn't go into detail about the reasons behind it when we filed with him, he was basically a paperwork shuffler - took the fee, filed the paperwork and left us on our own (he didn't even show up for the hearing). I guess my question would be, "why ask for the info from the attorney and not the job applicant herself?"

[fireworks]

I suspect their opinion is that the lawyer would be more objective about the situation and less likely to "massage the facts." That may or may not be true, but that's the opinion that many people would have.

Another possibility is that they want to cover themselves in case there's some future problem - if your wife were to do something stupid, the company was sued, and the bankruptcy was brought up in court, they could say "we consulted the lawyer and he said it was OK."

I'm not saying that any of this makes sense, but it's the way that HR people sometimes think. A big part of their responsibility is to avoid bringing lawsuits against the company, and if there are lawsuits to protect the company from liability.

[SunshineGal]

By requesting the letter from the attorney, they are adding proof to the file that the bk was caused by reasons beyond her control, such as your son's illness.

[Flamingo]

Best tip is to provide exactly what is asked for and be as honest as possible. Now is not the time to lie or cover anything up. Tell the attorney without his help your wife could be passed over for a position and you would appreciate his prompt attention to the matter.

[Planetary]

She didn't get the job and this was the explanation:

"...HR Business Partner and Employee Relations Manager (has) determined that we would not be able to move forward with an offer for employment if your background check shows more than 3 accounts in collections within the last year. An account is turned over to a collections agency when it is a certain number of days past due. That is what it means to be “in collections”. Unfortunately, it would not be a matter of our being comfortable with your explanation as to why there may be issues, it would be a matter of legal risk and corporate policy."

[SunshineGal]

Sorry, I know some companies have very strict rules regarding prior bks.

[logansdad]

this s*** needs to be worked out. EVERYONE needs policy changes after all that has happened to this country.... It isn't 1973 anymore the 1973 mentality has to come up several notches. I see some changes coming from the administration, they wont be standing for this either. Like 2 yr restrictions on foreclosure so someone can go back to work to build houses that more people can buy easier etc... or no credit disclosure on job apps. Bad things happen to good people how can we turn this economy around if this s*** is still allowed?

/vent off

[Pizza]

What was being sold that would cause such a big worry on their behalf?

I never thought sales was a hot spot for credit checks...

[Flamingo]

What was being sold that would cause such a big worry on their behalf?

I never thought sales was a hot spot for credit checks...

Well, in this day and age of ever increasing fraud, embezzlement and theft, all employers are ensuring that they protect themselves and their businesses/stockholders/other employees/customers/clients as much as possible. In fact, for insurance or legal purposes, credit checks/background checks on all prospective employees are becoming commonplace for most jobs. All one can do is be upfront and honest about their situation when/if asked but remember that it may be difficult to get around the company's policy as to hiring because their hands are tied due to legal or insurance reasons. I can state for a fact that certain employers I knew in the past that did not run credit checks are doing so now and the prospective employees will not even come closeto handling any cash, checks, accounts or access to anyone's checking/savings or other account.

[Pizza]

Well, in this day and age of ever increasing fraud, embezzlement and theft, all employers are ensuring that they protect themselves and their businesses/stockholders/other employees/customers/clients as much as possible. In fact, for insurance or legal purposes, credit checks/background checks on all prospective employees are becoming commonplace for most jobs. All one can do is be upfront and honest about their situation when/if asked but remember that it may be difficult to get around the company's policy as to hiring because their hands are tied due to legal or insurance reasons. I can state for a fact that certain employers I knew in the past that did not run credit checks are doing so now and the prospective employees will not even come closeto handling any cash, checks, accounts or access to anyone's checking/savings or other account.

I guess that's all we can do, be upfront and honest. Maybe this is part of the reason everyone boasts networking as the key to getting a job - an employer knows at least a little bit about you and has a head start on judging your character.

With this recession, though, good God, if credit is the make and break, how is anything ever going to improve for the newly impoverished? If bad credit is as bad as armed robbery, may as well do the latter - at least that way you might get some money... I think this practice needs to be outlawed, HR 3149 is a stalled bill on such, but some states have already outlawed or limited credit checks for employment due to cries of discrimination and the depth of the recession. I hope the bill passes or other states follow suit until it's banned.

[nerves]

They need to ban the credit checks for things such as car, home insurance as well. If you don't pay - you don't have insurance - simple as that. If they think someone is going to commit arson or something stupid due to financial issues - they would do it before filing bk. The credit check is just another scam to collect additional revenue without probable cause. JMO...

[leena]

Unfortunately, up to 50% of employers are doing these lovely checks now, and in some industries that figure may be more like 90% (and in others more like 20%, it all depends). I *love* that Oregon is joining a few other states to ban these, they are wrong I think on so many levels. Truth be told, I think they are being used as a "weeder" tool in a bad economy, more than that most employers seriously believe there is a relationship between bad credit and theft, or even overall job performance.

If it is any comfort, your wife probably missed out on working for one of the jerkier employers out there. Personally, as someone not working the financial or Security industry (where these checks have always come with the territory) I would not want to work for someone who does a credit check. It shows an attitude I would rather not deal with.

People with good or bad credit should seriously start standing up to this invasion of privacy and mess of false assumptions. The bad news is that the practice has increased in recent years-the good is that as people get more and more fed up with it, more legislation will be introduced in more states to stop it-and "states" is where it will happen I think-not in the Federal government.

Meanwhile, I agree if you choose to allow an employer to check your credit be honest and upfront and hope for the best-but prepare for the worst.

[leena]

The "BK Attorney Letter" Was a Legally Questionable Request

My wife who's been unemployed for almost exactly 12 months is very close to being hired for a new sales position. However, the employer asked her to provide a letter from our BK attorney explaining the circumstances behind our Chapter 7 ($100k+ worth of medical bills for child paid for with credit cards) which she had to list on their credit check. My wife is uber-stressed the employer will pass her over because of this. FWIW, we're in California.

Anyone have any tips? Prior experiences?

Just as a final note here, what the employer did in asking for more documentation on the bankruptcy was highly questionable from a legal standpoint. The law does not permit employers to discriminate against those who have filed bankruptcy except for positions related to Security Clearances or in some finance positions, or those making over 75K annually.
I am not surprised they hastened to cover their tracks and say it was because you had late payments in the previous year, which they can use to not hire you.

The law against BK discrimination is usually null and void in practice, because they can always find another reason not to hire and because most BK filers have bad credit prior to the BK.

It is funny, though because if you chose to you could probably make an issue about them being in violation of the law by even requesting that letter from your BK attorney. Not that I would recommend doing that, because it would be more hassle than it is worth.