Can Your Personal Bankruptcy History Be Held Against You by a Potential Employer?

When it comes to applying for employment, certain federal laws such as Title VII of the Civil Rights Act of 1964 and the Americans with Disabilities Act (1990) prohibit employers from discriminating against potential workers on the basis of race, sex, and other immutable characteristics. But what about a history of personal bankruptcy? Can a potential employer discriminate against you on the basis of your financial background? According to a recent article in the Huffington Post, this is a somewhat murky area in many states, especially when the employee will be responsible for handling financial transactions or managing other financial aspects of a business.
What else do you need to know about the potential link between consumer bankruptcy and employment discrimination? In brief, Illinois has a specific law about when an employee may be able to obtain information about your financial background (and whether you have filed for bankruptcy protection). Keep in mind, however, that there are exceptions.
Background Checks and Credit Checks in Illinois
As of January 1, 2011, a law has been in place in Illinois known as the Employee Credit Privacy Act (820 ILCS 70/) that prohibits many employers in our state from performing credit checks on potential employees, as well as performing credit checks on current employees who are up for promotions. Specifically, the law prevents an employer from doing the following:
  • Obtaining a financial background report, or credit report from a consumer reporting agency, on a candidate for a job or a current employee; and
  • Using information in the financial background of a potential employee or a current employee (such as a Chapter 7 bankruptcy filing) to make a decision about whether to hire or fire that person, or what the terms of that person’s employment might look like.
Yet as the law makes clear, the definition of an “employer” as it is defined in the statute does not include a number of different organizations and businesses. As such, there are exceptions to the law, and the following entities may be permitted to perform a financial background check, to see information about a candidate’s or current employee’s history of bankruptcy, and to make an employment decision based on that information. Those entities include but are not limited to:
  • Bank holding company;
  • Savings and loan association;
  • Credit union;
  • Trust company;
  • Insurance company;
  • State law enforcement units;
  • Certain state and/or local government agencies; and
  • Debt collectors.
If you apply to work for a business that falls into one of the categories listed above and you have recently filed for bankruptcy, your credit report likely will reflect that financial decision. In turn, the types of agencies and businesses listed above are not bound by the Employee Credit Privacy Act, and thus they may take into account your financial background when deciding whether to offer you a job.
Contact a Bankruptcy Lawyer in Oak Park, IL
If you have questions or concerns about how filing for bankruptcy may impact your eligibility for certain forms of employment in the near future, an experienced bankruptcy attorney in Oak Park can discuss your financial options with you, as well as possible alternatives to consumer bankruptcy. Contact the Emerson Law Firm today to speak with a dedicated consumer advocate.
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