Recently, Sen. Elizabeth Warren (D-Mass.) and Rep. Steve Cohen (D-Tenn.) began calling for a ban on the use of credit checks during the employment hiring process.
The two politicians wrote an editorial, saying the practice is not fair in the wake of the 2008 financial crisis. Additionally, they reintroduced the Equal Employment for All Act in Congress, which would ban companies from checking the credit reports of potential employees with only a few exceptions.
“For hardworking people struggling to make ends meet, the only way to get back on their feet is to find a good job and earn a paycheck. But even when they are able to sell their homes—often at a loss—or after they are forced to close their business’ doors or find temporary work, that bad credit history continues to haunt them,” Warren and Cohen wrote, according to the Huffington Post.
The pair says that many credit reports contain inaccuracies that unfairly haunt potential employees. According to the HuffPost, a 2012 survey found that 53 percent of employers said that they did not conduct background checks on any of their job candidates, though 87 percent said that they did check the credit history of potential employees in financial positions.
To read more about the Equal Employment for All Act, you can click here.
As of last week, the bill was assigned to the Committee on Health, Education, Labor, and Pensions, which will review it and could send it to a vote in the House or Senate.
How Long Does Bankruptcy Stay On Credit Reports?
We appreciate attempts by politicians to end the unfair practice of employers using credit reports to make hiring decisions. Earlier this year, we blogged about how people can improve their credit following a bankruptcy. As we noted, all people, not just those who have filed for bankruptcy, should check their credit reports regularly for inaccuracies.
Unfortunately, for those who have filed, a Chapter 7 bankruptcy stays on credit reports for 10 years, while Chapter 13 bankruptcy remains for seven years. Fortunately, the benefits of filing for bankruptcy far outweigh the penalties.
Through a bankruptcy filing, you may be able to discharge certain debts like credit card debt and medical bills. In addition, you may be able to enter into a repayment plan with creditors to reduce the amount of money you owe on certain debts.
When you file for bankruptcy, an automatic stay goes into effect, meaning your creditors, including bill collectors, can no longer call and harass you.
For more information about the benefits of bankruptcy for people who are struggling financially, continue to follow our blog.