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Does the current economic situation change bankrupcy as a disqualifier?

Discussion in 'Cop Talk' started by OXCOPS, Nov 20, 2011.



    Dec 31, 2000
    Had this conversation with a friend of mine, who does backgrounds and applicant processing for his agency. We were talking about a recent round of candidates and he asked me what I thought. He gave me two situations for a couple of applicants.

    Candidate 1 declared bankruptcy about 4 years ago after a divorce. Since then, he has worked to restore his credit and is current on payments.

    Candidate 2 declared bankruptcy 6 months ago. Seems his wife had a series of surgeries and was out of work for a couple of months. She didn't have enough PTO, so most of it was unpaid leave. Upon further questioning, the candidate said he tried to find second jobs, but no one was hiring.

    Now, this agency has an unspoken rule that a bankruptcy within 5 years is an immediate disqualification. However, my friend is questioning whether that should remain the case. If there is a satisfactory reason behind the bankruptcy, should it be allowed to pass?

    What do you guys think?
  2. toddmog


    May 28, 2007
    Is it an unspoken rule or actual policy? Times are tough, I would lean towards evaluating each situation on a case by case basis. Both scenarios described above seem like legit causes. It wasn't like either ran up $50K in credit card bills and said "forget it, I'll just declare bankruptcy."
    Last edited: Nov 20, 2011

  3. razdog76

    razdog76 Heavy Mettle

    Sep 26, 2007
    The purpose for any employer to look at credit reports is to see how squared away the candidate's personal life is. This is important to gauge their decision process. In addition, as an LEO it is also important to have credit squared away in an effort to prevent corruption.

    Now to look at it in another light, all of the tests a candidate must pass are to provide the best people for the job. So, for the test to be valid, does it measure/give the answers you need, to produce the best candidate?

    IMHO, the answer depends a couple factors. How many applicants were there? How many are left? What percentage have credit issues at this stage in the process? What was the cause of the bankruptcy (misfeasance, malfeasance, nonfeasance, or something exceptional)?
  4. msu_grad_121

    msu_grad_121 BOOSH

    Sep 16, 2009
    NW Burbs
    Both cases seem like they're not terrible candidates, but rather victims of circumstance. Without knowing all factors, it's hard to say one way or another how a department might look at either case. I will say that I've been told by several agencies that due to the severe economic downturn, they don't rely as heavily on credit scores, but who knows exactly what that means? I know I've gotten a few nasty-grams from Comcast and such, but I've never been told I've been disqualified for credit issues.

    Honestly, either case sounds like it could happen to anyone, but razdog's right, they use it as an indicator if you're a turd or not. Again tho, if you're forthright about it and say, "this is what happened, this is why it happened, I'm taking care of it in this way," I don't know too many departments that will straight up can you over it.

    Long story short, I dunno.
  5. blueiron


    Aug 10, 2004
    Bk was not a sole DQ for us, contingent upon the circumstances. Medical bills and divorce were usually not a problem, since medical emergencies/chronic conditions cannot be budgeted for by most people. Acrimonious divorces can lead to a spouse emptying accounts and killing credit cards.

    Rampant credit card spending for no clear purposes and a BK was a DQ for a period of several years.

    Every CLEO is different and each has their preferences. I worked for one who disliked military veterans and wasn't shy about it.


    Dec 31, 2000
    It isn't specifically spelled out in their evaluation guidelines. Those are written to allow the evaluator to consider the totality of the circumstances. However, in better times it was understood that this would be a no-go. This is their first hire of non-certified recruits in a couple of years.
  7. merlynusn


    Nov 16, 2007
    Without looking at anything else, I'd say that both of those candidates have reasonable reasons for why they declared bankruptcy. Like others have said, it isn't like they were in debt due to credit cards or partying. One was a divorce that was 4 years ago and he's worked to rebuild his credit. The other is for major medical concerns, which is unbudgeted. Heck, if I had to have a surgery and pay my deductible now, it'd be a major stretch and I'd be working a crapload of off duty once I got back to full duty (we can't work off duty when we're in a limited duty status).
  8. jpa

    jpa CLM

    May 28, 2001
    Las Vegas NV
    I'll use my own situation as an example.

    Last year I wanted to settle my credit cards, but the banks wouldn't talk to me about it unless I was delinquent. So I stopped paying for about 6 months. In that time as luck would have it, I applied for a job at a local LE agency. I made it to backgrounds and the detective ran my credit report. She took her red pen and circled all the delinquencies (5 accounts, 6 months of no payments...didn't look good). I explained the situation and a week or so later got a "thanks but no thanks" letter.

    Fast forward to about a month or so ago. I applied for 2 new jobs they had posted for the same agency. Passed the written and interview with flying colors, then went back to the same background investigator after the interview. She remembered me, then pulled up my current credit report. I've since paid off and closed all of those accounts and she was flabbergasted at the change in my credit report. I just got notification of my ranking on the list a couple weeks ago and job offers should be coming by the end of the year. I got my fingers crossed, but it's better than a flat rejection.
  9. NDCent

    NDCent Socially Inept

    Mar 19, 2010
    Maybe I missed something, but what does todays economic condition have to do with either candidate? Neither one were layed off for economic reasons, so whats the reasoning for using a different standard than before? If it's because todays hiring pool is smaller I could see a possible change in criteria, but divorce and sickness in families is an everyday occurrence in good times as well as bad. Don't get me wrong both seem to have reasonable reasons for filing and may be outstanding applicants otherwise, but...
  10. DaBigBR

    DaBigBR No Infidels!

    Oct 28, 2005
    Circling the wagons.
    I wouldn't ever consider it an automatic disqualification, however the circumstances are important. In those two cases one thing that I would look at is the amount of money the applicant would make as an officer versus their current employment and be cautious about somebody taking a pay cut to become a cop.
  11. mixflip


    Mar 4, 2009
    I think today... everybody is affected in some shape or form by foreclosure or bankruptcy so as long as the circumstances are reasonably explained, most depts will overlook those issues on a case by case basis.

    I know an officer who had a foreclosure and he was hired. They even told him in the board interview that "everybody knows someone with a foreclosure or bankruptcy".
  12. OXCOPS


    Dec 31, 2000

    It doesn't directly. Well, the second guy was trying to pick up extra work to pay the bills, but couldn't find one.

    Indirectly, I wondered if agencies are looking at them a little more reasonably since the current economic downturn has affected so many.

    In their cases, they would both be getting a pay bump.
  13. Kahr_Glockman


    Feb 26, 2005
    My dad is the chief deputy for a 180 man agency here in Texas. I asked him about this situation because I am in the same situation. His agency is looking at credit reports but they are not DQ'ing over this. They have seen a marked increase in bad credit and they are having a hard time filling positions with people with otherwise good backgrounds.
  14. blueiron


    Aug 10, 2004
    So because someone has a child born with a pre-existing medical condition and whom insurers will not touch or because an man/woman has a cheating spouse who goes binge spending for their new paramour and cleans out the joint bank account for their new life together; these unintentionally affected people are not qualified to be cops?

    Would you extend your reasoning to everyone in traffic accidents, proposing that anyone involved a traffic accident has some contributive effort, as well?
  15. msu_grad_121

    msu_grad_121 BOOSH

    Sep 16, 2009
    NW Burbs
    Welcome to the No-Fault state. You're 20% at fault for even being on the road! It boggles the mind, huh? :rofl:
  16. PlasticGuy


    Jul 10, 2000
    Bankruptcy is a disqualifier for a couple reasons. First is that it may be an indicator of bad decision making, laziness, or both. Second is that not having money makes a person more corruptable. Even if the first one is not true, the second always is. I hate to be brutal. I would also hate to be working with someone who could be easily bribed.
  17. L-1


    Sep 4, 2011
    Bankruptcy is a legal right. Absent any evidence of fraud, the mere fact that a candidate has undergone bankruptcy cannot be the sole basis upon which employment is denied. (11 USC § 525)
    Investigators may inquire into the circumstances that led up to bankruptcy, including the examination of supporting court records regarding reported assets and liabilities at the time when the bankruptcy petition was filed. Once filed with the United States District Court, these are public records.

    Remember though, Bankruptcy alone is not necessarily the issue. Financial history checks are performed on applicants to determine their credit standing with lenders as an indication of the candidate’s dependability and integrity. Areas that will be addressed include whether reported sources of income are lawful and fully accounted for, whether the candidate meets his/her obligations as agreed, and the reasons underlying any indications of credit problems (e.g., are the credit problems the fault/responsibility of the candidate, or are they related to the actions of others?)

    Things like past due accounts, discharged debts, late payments, collection accounts, civil judgments, and/or bankruptcy, h​
    istory of flagrant financial instability such as multiple personal bankruptcies, financial obligations for which legal judgments have not been satisfied, failure to meet obligations (for example, auto insurance, auto registration, selective service registration, IRS requirements, child support obligations) are viewed as lack of personal accountability and responsibility, which are minimum requirements for the job and can lead to a financial DQ.

  18. series1811

    series1811 Enforcerator. CLM

    The last briefing I had from our security people (who process our SSBIs) for our security clearances was about two years ago. At that meeting, bankruptcies and foreclosures came up and we were told that neither was an auto dis-qualifier any more for a TS, and that each case was reviewed on the particulars of the situation.

    I've lost count of the number of federal agents I know who had to take short sales or foreclosures because of being transferred with an underwater home loan. PCS moves in my agency only pay you fair market value for your home. If that is less than you owe, you can ask for a one year extension of the move, and then you have to take the hit or find a new job.

    We all thought that our HQS would ease up on the moves to keep so many agents from taking that financial beating. We were wrong.
  19. OXCOPS


    Dec 31, 2000
    Wait, bankruptcy equals corrupt cop?
  20. lawman800

    lawman800 Juris Glocktor

    We have never made bankruptcy an automatic disqualifier. You gotta look at the total circs and see how did the applicant get into the situation and how he is taking care of it.

    Having a bad run and losing a job or medical accident which wiped you out but making good and trying to pay things back via settlements is a lot different than just running up ten credit cards to buy crap and declaring bankruptcy so you can say **** you to the creditor.

    ETA: one of my best friends and one if the best cops I ever worked with went through a bankruptcy because he couldn't get a job that paid enough to cover his student loans. He eventually got back on his feet and is making good on all his loans, including one from me.
    Last edited: Nov 22, 2011