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  1. #1

    Default Can Poor Credit from Foreclosure or Bankruptcy Cost You a Job

    My question involves labor and employment law for the state of: CALIFORNIA

    What are the laws in California about potential employers running a credit check on job applicants as part of a background check ? Our home is facing foreclosure and my husband is worried that the terrible credit is going to affect his abilities to get promoted at his current job or to find a job in the future. A google search for "poor credit affects job opportunities" results in abundant horror stories of people who have been denied jobs or fired from existing positions due to poor credit resulting from foreclosure to bankruptcy to unpaid medical bills to simply errors on their credit reports.

    My husband is completely devastated and we just need advise for him. When we purchased this home 6 years ago, it was with the intention of living here for the rest of our lives and paying our housing bills on time. But, life happens. We are forced to move. We can survive without credit for the next few years, but we cannot survive without a job !

    He works in IT for a non-profit, and is not planning to apply for a promotion anytime soon. We just want to be sure that the impending foreclosure and possible bankruptcy will not create problems with his employment in the next few years. Please advise ? Thank you.

  2. #2
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    Default Re: California : Can Poor Credit from Foreclosure / Bankruptcy Cost You a Job

    It very well could cost him a job or a promotional opportunity if the employer requires a clean credit record - and it would be legal.

  3. #3
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    Default Re: California : Can Poor Credit from Foreclosure / Bankruptcy Cost You a Job

    One qualifier. With limited industry-specific exceptions, an employer cannot take adverse action against an employee because of a bankrupcy. Poor credit, yes. Bankrupcy, no.

  4. #4

    Default Re: California : Can Poor Credit from Foreclosure / Bankruptcy Cost You a Job

    Quote Quoting cbg
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    One qualifier. With limited industry-specific exceptions, an employer cannot take adverse action against an employee because of a bankrupcy. Poor credit, yes. Bankrupcy, no.
    Pardon my ignorance, but what is the difference ? If we had "just" the foreclosure on our records, would that be cause for the employer to refuse promotions, or god forbid, even fire him from his current job ? But they cannot do this if he has borh a bankruptcy and a foreclosure ? He is in IT, and does not handle money or have access to other people's financial or personal information.

    This is quickly becoming a big nightmare.

  5. #5
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    Default Re: California : Can Poor Credit from Foreclosure / Bankruptcy Cost You a Job

    Quote Quoting Foreclosure
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    This is quickly becoming a big nightmare.
    WHAT is quickly becoming a big nightmare?

    You might get better responses if you tell us what is happening and to whom it is happening, rather than ask hypothetical questions.

  6. #6
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    Default Re: California : Can Poor Credit from Foreclosure / Bankruptcy Cost You a Job

    Quote Quoting Foreclosure
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    Pardon my ignorance, but what is the difference ? If we had "just" the foreclosure on our records, would that be cause for the employer to refuse promotions, or god forbid, even fire him from his current job ? But they cannot do this if he has borh a bankruptcy and a foreclosure ? He is in IT, and does not handle money or have access to other people's financial or personal information.

    This is quickly becoming a big nightmare.
    If he is not in the financial services industry, I wouldn't worry too much.

    Never trust anyone with your wealth that has bad credit!!!

  7. #7

    Default Re: California : Can Poor Credit from Foreclosure / Bankruptcy Cost You a Job

    Quote Quoting adjusterjack
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    WHAT is quickly becoming a big nightmare?

    You might get better responses if you tell us what is happening and to whom it is happening, rather than ask hypothetical questions.
    Jack, this is not a hypothetical question. We are facing foreclosure. At auction sale, the junior lender of the purchase money loans will probably be wiped out. While we may not be sued as these loans are non-recourse in the fine state of California, the fact remains that this will ruin our credit. I suspect that the junior may sell the loans to a collections agencies and that that may end up creating a lot of hell for us.

    We can live with poor credit. We can live with NO credit. But we cannot live without a job. We happened upon articles on the web about how poor credit affects employment, how people are being passed over for promotions or even being fired when current employers become aware of their foreclosures or bankruptcies.

    I am aware that California passed a law a while ago limiting the use of credit reports in hiring and or retaining employees. However, we all know that laws can always be side stepped.

    We are a one income family. My husband works in IT for a non-profit. I stay home taking care of our special needs child as managing his therapies is a 24/7 job in and of itself. We worry that our very poor credit may affect this employment adversely. We worry that his current job may be in jeopardy or that he will have difficulties finding a new job if needed, if his current or future employers become aware of our terrible credit from the foreclosure.

    This is not a hypothetical situation. We are in real trouble and need advise. Thanks !!

  8. #8
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    Default Re: California : Can Poor Credit from Foreclosure / Bankruptcy Cost You a Job

    Quote Quoting Foreclosure
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    Jack, this is not a hypothetical question. We are facing foreclosure. At auction sale, the junior lender of the purchase money loans will probably be wiped out. While we may not be sued as these loans are non-recourse in the fine state of California, the fact remains that this will ruin our credit. I suspect that the junior may sell the loans to a collections agencies and that that may end up creating a lot of hell for us. i can live with poor credit. I can live with
    NO credit. But we cannot live without a job. We happened upon articles on the web about how poor credit affects employment, how people are being passed over promotions or even being fired due to their poor credit.

    I am aware that California passed a law a while ago limiting the use of credit reports in hiring and or retaining employees. However, we all know that laws can always be side stepped.

    We are a one income family. My husband works in IT for a non-profit. I stay home taking care of our special needs child as managing his therapies is a 24/7 job in and of itself. We worry that our very poor credit may affect this employment adversely. We worry that his current job may be in jeopardy or that he will have difficulties finding a new job if needed, if his current or future employers become aware of our terrible credit from the foreclosure. We are in real trouble and need advise. Thanks !!
    You are worrying yourself and getting all worked up for nothing. California is one of the most employee-friendly states in the Union.


    I suggest that you speak to a BK attorney - I'm not saying you should file for BK, just speak to them about your financial situation. At least you'll have more information.

  9. #9
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    Default Re: California : Can Poor Credit from Foreclosure / Bankruptcy Cost You a Job

    Quote Quoting Foreclosure
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    Jack, this is not a hypothetical question. We are facing foreclosure. At auction sale, the junior lender of the purchase money loans will probably be wiped out. While we may not be sued as these loans are non-recourse in the fine state of California, the fact remains that this will ruin our credit. I suspect that the junior may sell the loans to a collections agencies and that that may end up creating a lot of hell for us.

    We can live with poor credit. We can live with NO credit. But we cannot live without a job. We happened upon articles on the web about how poor credit affects employment, how people are being passed over for promotions or even being fired when current employers become aware of their foreclosures or bankruptcies.

    I am aware that California passed a law a while ago limiting the use of credit reports in hiring and or retaining employees. However, we all know that laws can always be side stepped.

    We are a one income family. My husband works in IT for a non-profit. I stay home taking care of our special needs child as managing his therapies is a 24/7 job in and of itself. We worry that our very poor credit may affect this employment adversely. We worry that his current job may be in jeopardy or that he will have difficulties finding a new job if needed, if his current or future employers become aware of our terrible credit from the foreclosure.

    This is not a hypothetical situation. We are in real trouble and need advise. Thanks !!
    You said junior lender. Was there a second on this house? Seconds would NOT be non recourse loans.

  10. #10

    Default Re: California : Can Poor Credit from Foreclosure / Bankruptcy Cost You a Job

    Quote Quoting CourtClerk
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    You said junior lender. Was there a second on this house? Seconds would NOT be non recourse loans.
    We talked to a real estate attorney that our junior loans being purchase money loans are also non-recourse loans. We are not worried about the nature of the loans, these have been confirmed non-recourse by an attorney with several years' experience in real estate laws in California.

    Our credit is going to be TRASHED. We are aware of that. My main worry now is how this will affect employment. We need a job because it is the source of insurance that pays for our son's extensive therapy. We want a fresh start, we just want to move on with our lives and getting our son to talk, and gain basic skills. We never plan to EVER own a home again, we are DONE. So, poor credit does not bother me. It is the effect on poor credit on EMPLOYMENT that freaks me out. We need the job to be able to rent an apartment, feed & clothe ourselves and get our disabled child the help he needs. We cannot do thia without a job.

    One financial mistake should not ruin a family forever. It should not affect an innocent child's life. This is a nightmare. If it hasn't been for our kid, I wouldn't be this terrified about the ramifications of a foreclosure.

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