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Feb 2011Bankruptcy is better on your job resume than bad debt
Posted by Robert Weed / in Virginia Bankruptcy / 3 comments
A bankruptcy client sent me a wonderful email yesterday. Â “I can finally see light to get on with my life.” Â Why? Â “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. Â The worst thing you can have when an employer checks your credit is–bad credit. Â Unpaid bills. Â Charge offs, repossessions. Â 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. Â 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.
With bad credit, you can't get a job at TSA. With bankruptcy, you can.
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. Â But most don’t care.
Between bad credit right now, and bankruptcy in the past, bankruptcy is nearly always much better.
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Robert Weed has helped fifteen thousand people file bankruptcy in Northern Virginia. Robert Weed is a frequent panelist and speaker at the meetings of the National Association of Consumer Bankruptcy Attorneys. He is one of Northern Virginia’s most experienced personal bankruptcy lawyers. As an expert on changing consumer bankruptcy laws, Robert Weed has been interviewed on local and national TV and quoted in newspapers across the country.
Robert Weed
Just had a lady come to see me all frantic today. She needs to file bankruptcy by the end of the month. Been working for a temp agency since last fall–and has a new assignment in April in the financial area. “But we can’t give you that assignment unless you work out a payment plan with your creditors–or file bankruptcy–by April 1. ”
One more example of something I talk about every week. So many people think the worst thing you can have on your record is bankruptcy. WRONG. The worst thing you can have is bad debt; if you have bad debt, you need bankruptcy. Bankruptcy is better.
Yolanda Cowan
Can someone in bankruptcy be hired by DOJ or Pentagon?
Thanks.
Robert Weed
Yolanda:
Yes. I deal with more on that, here. https://robertweed.com/2011/08/07/defense-cutbacks-bankruptcy-and-your-security-clearance/.
Here’s the section of the law that says government cannot deny employment because of bankruptcy. http://www.law.cornell.edu/uscode/text/11/525