Colorado lawmakers are mulling a decision that would prohibit employers from using a previous Denver bankruptcy as a means for ruling out a potential job candidate. 
Denver bankruptcy attorneys are encouraged by this discussion, and hope lawmakers will move forward with the legislation. Not only will it have practical protections for our clients, but it also will go a long way in further showing that a bankruptcy should not be considered a sign of poor character or bad judgment.
The fact is, the economy has created a perfect storm of sorts that has made it difficult for many people to stay afloat. Millions of Americans are underwater on their mortgage – and not because it’s their fault, but because mortgage servicers and lenders were complicit in various acts of deception and fraud. There are also individuals struggling with large medical bills. Changes over the last few years within the health care community have shifted the burden of those payments onto patients, rather than insurance companies, so it’s no wonder so many people are struggling. Then you have individuals who are buried in student loan debt and are emerging into a job market with far fewer options than those just a few years ago.
So the fact that an individual files for bankruptcy should not be considered a moral or ethical deficit. In fact, it’s often a savvy financial decision.
There are already seven states – Hawaii, California, Maryland, Illinois, Oregon, Washington and Connecticut – that have stopped the practice of employers using it as a mark against job-seekers. Many of those have some sort of exemption for individuals who are responsible for managing large amounts of money. We still think this is a stretch.
The bill in Colorado, which is sponsored by an Aurora Democrat, would effectively end this practice.
A study two years ago did show that employers don’t typically use credit scores as a top indicator of candidate viability, but it is sometimes considered a factor nonetheless.
The Federal Fair Credit Reporting Act, which was passed in the 1970s, mandates that employers get permission from the job candidates before they run their credit reports, but some Colorado legislators feel this doesn’t go far enough.
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