A search is conducted through proprietary databases to identify public records of bankruptcy proceedings. All bankrupcty proceedings are held in federal court and are generally accesible to the public. Most records include the bankruptcy filing date, case number, type of bankruptcy, debtor, trustee and status.
Employers should approach the use of bankruptcy records with caution and consider whether a bankruptcy record is related to an occupational qualification. The employer must show that the bankruptcy information is a valid predictor of future job performance and does not have a discriminatory impact on the candidate. Without a legitimate business justification no adverse action can be taken against a job candidate solely due to a past bankruptcy. If for any reason, an employer believes that a bankruptcy is relevant to the job, then the employer should consult with his/her attorney to ensure that the use of the record in a hiring desicion is justified.