Free Consultation
The office is open as per the NYS Covid-19 guidelines. We are now doing both in-person and telephone consultations. Please call the office at 718-855-6840 to schedule a time to speak with one of our experienced bankruptcy attorneys.

New York City to Ban Credit Checks for Job Candidates

Credit scores were primarily invented to help lenders gauge debtors’ creditworthiness with a handy, neutral (hopefully) benchmark rather than relying on references or worse, insider dealings. It didn’t take long, however, for other parties to start using them, like landlords seeking reassurance that their tenants would pay rent on time. With employers, however, it’s different. A job is necessary for someone who has poor credit to become more creditworthy, and when jobs are scarce and pay is low, then a poor credit score can keep people out of work entirely.

The New York City Council believes credit scores shouldn’t be used that way, and on April 17th, it passed a law banning most employers from using credit scores to evaluate job candidates. The vote was a lopsided 47 to 3 in favor of the bill. Eight U.S. states forbid the practice, as does the city of Chicago.

The New York Times reported on the story, focusing on a Harlem entrepreneur who couldn’t find a job after her business failed and her credit deteriorated. According to a 2010 survey, 60 percent of the city’s employers use credit scores when hiring, even for jobs as mundane dog walkers, yet somewhat surprisingly, the bill’s proponents managed to limit the number of carve-outs, loopholes, and exceptions for employers. There is a fear that people with poor credit ratings will be fiduciary risks, stealing from the company’s accounts to repay debts, engage in fraud, go gambling, or accept bribes by third parties. As a result, there are some exceptions like for NYC police officers and fire marshals, as well as government employees whom the law requires to have some kind of security clearance. There’s also a provision for employees for “signatory authority” over third-parties’ assets that are greater than $10,000. The other nine jurisdictions banning employer credit checks aren’t nearly as strict, and some of them even permit the practice throughout their financial industries.

The New York Times article on the bill can be found here.

If people with low credit scores can find work, then that’s probably a good thing. It might help keep them out of bankruptcy. If you are encountering financial difficulties and your credit is affected as a result, then you should know that filing bankruptcy can actually boost your score. For that reason you should consult with an experienced New York bankruptcy lawyer.

For answers to more questions about bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced bankruptcy automatic stay Bruce Weiner for a free initial consultation.

Rosenberg, Musso & Weiner, L.L.P
26 Court St # 2211
Brooklyn, NY 11242, USA

Recent Posts

Beware Grace Periods, Debtors

Too often, debtors see grace periods offered by lenders as free benefits. “Grace” makes it sound so innocent. However, debtors who routinely rely on grace periods when making payments will find themselves facing financial difficulties that might lead to bankruptcy. The reason is that although creditors offer grace periods to debtors, they also use them

Read More »

Bankruptcy May Not Rescue You From Vicious Personal Disputes

Bankruptcy is a technical process that assumes everyone working within it is mostly rational. To the extent that it expects parties to deviate from irrational behavior, the Bankruptcy Code and its accompanying rules include incentives to keep parties in line. Creditors are usually large and impersonal, and they rarely care if their debtors file bankruptcy.

Read More »

Non-Lawyers’ Explanations of Bankruptcy May Be Wrong

Do you have financial problems? Do you tend to ask your friends for advice? Is one of your friends an experienced New York bankruptcy lawyer who will explain the process for you? Are your friends otherwise knowledgeable people? The answer to these questions may be, “Yes but you don’t know it.” Although many bankruptcy lawyers

Read More »

6 Steps to Take Before Filing Bankruptcy

Leaving your case to an experienced New York bankruptcy lawyer is not the only step on the to-do list before filing bankruptcy. There are many things debtors should do (and not do) before they file, and the more organized and mindful debtors are, the easier the process will be and the more effective the result.

Read More »

Social Security Number Not Necessary for Bankruptcy

A question that’s commonly asked about New York bankruptcy is whether a debtor needs a Social Security number to file. Debtors ask because they sometimes run across the bankruptcy form title, “Your Statement About Your Social Security Numbers” (B 121), which asks debtors to list their current and prior Social Security numbers. The new bankruptcy

Read More »

How Can a Debtor (or Creditor) Get a New Trustee?

The trustee in a New York bankruptcy case is usually not the debtor’s ally. His or her purpose is mainly to administer the bankruptcy estate or ensure the debtor’s repayment plan goes according to plan. Trustees pursue preference payments, fraudulent conveyances, and other malfeasance committed by debtors. They frequently initiate adversary proceedings against debtors. In

Read More »
Scroll to Top