Hundreds of thousands of Americans who have lost their jobs during the coronavirus pandemic could be confronting an added barrier as they seek to rejoin the workforce: a bankruptcy on their record, the Wall Street Journal reported. Federal law allows private employers to turn down a job applicant because of a past bankruptcy filing, which employers can ask about on a job application or learn about through a credit check. Some business groups support the practice, saying that there are instances when the information is relevant, such as in hiring for positions that handle money. Consumer advocates disagree, saying that bankruptcy isn’t necessarily a sign of financial recklessness, but rather is frequently the unintended consequence of health problems or a divorce — or this year could involve a business done in by the pandemic. “There are millions of people, some who may have to file for bankruptcy as a result of [the pandemic], that could be adversely affected when they try to re-enter the job market,” said Tara Twomey, executive director of the National Consumer Bankruptcy Rights Center. While it isn’t clear how many of the 21 million people currently unemployed may have filed for bankruptcy, University of Illinois at Urbana-Champaign law professor Robert Lawless says that the number could exceed 750,000 based on his estimate that at least 3.6 percent of the U.S. adult population has filed for bankruptcy in the last 10 years. An average of about 800,000 people filed for bankruptcy annually during the last five years, a figure that is expected to rise as the U.S. economy falters.
