A bankruptcy client sent me a wonderful email yesterday. ”I can finally see light to get on with my life.” Why? ”I got the job!”
Bad credit was no longer blocking him from getting the job he wanted.
My friend had been out of work for more than two years; and while he was out of work his credit had been completely shot. And bad credit had been holding him back. Filing bankruptcy got him the job.
He needed everyone of his bad debts to be reported as “in bankruptcy” on his credit report. As soon as they did, he got clearance for a Federal government job. A job he had been turned down for, just six weeks before.
I’m a lawyer in Northern Virginia. I see a dozen people every month who have clearance issues on their jobs. And it’s amazing how many people have it in their heads that bankruptcy is the worst thing you can have on your record.
That’s totally wrong. The worst thing you can have when an employer checks your credit is–bad credit. Unpaid bills. Charge offs, repossessions. All those things are career killers.
Bankruptcy is much better than those things. Bad credit means you are in trouble now. Who would anyone want as an employee? Someone in trouble now? Or someone who cleaned it up?
Obviously never being in financial trouble is best. But once you are in trouble, wise employers and security clearance officers want to see that you took care of it.
I know some people reading this still don’t believe me. So look at this letter. This is the letter that TSA sends when they turn someone down for a job because of bad credit. You get turned down if you have more than $7500 in charge offs, repossessions, collections, debts 120 days or more late.
But TSA says it’s ok if those debts have been discharged ”in bankruptcy.”
Bankruptcy is not the solution to all employment problems. It does not erase the bad credit you had before–that bad history is still there. (That’s one reason, if you know you can’t pay, why it’s smart to see a lawyer right away. Going straight from current to bankrupt looks a lot better than dragging around late payments for a year.)
Some companies won’t hire you even after you put the problems behind you. But most don’t care.
Between bad credit right now, and bankruptcy in the past, bankruptcy is nearly always much better.