There are many benefits to filing for bankruptcy in Indiana, whether it is Chapter 7 bankruptcy, which discharges your qualifying debts, or Chapter 13 bankruptcy which allows you to pay your debts off over time.
Bankruptcy allows you to start over financially, reducing the stress of worrying about paying bills, losing a home or not being able to provide for your family. However, you might worry about the potentially negative implications of bankruptcy, as well.
Your credit score will likely suffer for some time and you could be concerned that if your bankruptcy is discovered it may harm your chance of securing employment, licenses or other professional opportunities. Specifically, you might want to know if your bankruptcy will show up on a background check.
What is a background check?
A background check is an investigation into your background. It is typically done for employment or security clearance reasons.
Indiana employers may conduct background checks of potential employees to verify their identities and make sure there is nothing in their past that could cause problems for the company.
The type of background check depends on the employer or business conducting it. The check might include a review of credit reports, criminal records, driving history, educational history, employment history or a combination of them.
Credit reports
Bankruptcies do show up on credit reports. However, this information will only be available to the employer if they review credit reports as part of their background checks.
Some employers only perform basic background checks. A basic check may not include a credit report of financial history.
However, Chapter 7 bankruptcies generally only appear on credit reports for 10 years and Chapter 13 bankruptcies sometimes only appear for seven years. Once the applicable number of years have passed, bankruptcy should not show up on a credit report if a background check is conducted.
Public records
Bankruptcies are public records, which means anyone can see them. But this requires doing a specific public records search. An employer may not take the time to conduct a public records check and might never learn about your bankruptcy.
However, if they do, be aware that if bankruptcy is no longer on your credit report, an employer who performs a thorough and comprehensive background check could still learn about bankruptcy through a public record search or viewing of court records.
In summary, bankruptcies can show up on background checks, but it depends on the type of bankruptcy, who conducts the check and the type of check conducted.
Be honest if asked about bankruptcy
When you are interviewed for a job or other position and asked specifically about bankruptcy, answer honestly, even if you believe bankruptcy is no longer on your credit report. Remember there are ways for prior bankruptcy filings to be accessed if someone knows the right place to look.
The choice to file for bankruptcy is not an easy one. It is important to be aware of the potential consequences before filing. It is a good idea to talk with someone who can analyze your financial situation and answer your questions about the potential consequences before you file.
