Bankruptcy and Civil Record Checks

Bankruptcy and civil records checks can provide essential information to background reports – but how do you know if this is something you should be searching for? Let’s start by understanding what is included in both bankruptcy and civil records checks before getting into the various reasons you may choose to run either.


Non-criminal information from lower and upper civil county courts, federal civil court, and federal bankruptcy courts reveals information that may help you assess an individual’s trustworthiness and financial handling.


Bankruptcy

First, bankruptcy is a legal status that occurs when a debtor, who is unable to repay their debts, files as such in court. Debtors can choose to file for many reasons such as inability to pay for medical bills, a mortgage, or spending beyond their means and incurring debts that cannot pay. Bankruptcy checks may be important where an applicant’s role requires them to handle money, high value transactions, and other financial matters.


Civil Records

A civil record check involves looking into an individual’s history of civil legal matters. This type of background check focuses on non-criminal legal issues and can provide information about an individual’s involvement in several types of civil legal proceedings. Civil record checks may include civil lawsuits, judgements and liens, foreclosures, breaches of contract, divorce and family court records, restraining orders and injunctions, settlements, and property records. Employers, landlords, and financial institutions may use this information to make informed decisions about hiring, renting, or extending credit.


There are several reasons why bankruptcy and civil record checks may be right for you:


Financial Responsibility

Bankruptcy records can provide insight into an individual’s financial history and management of debt. Employers may be interested in assessing the financial responsibility of candidates, especially if the position involves handling financial matters or significant responsibilities.


Risk Mitigation

Employers may use bankruptcy and civil records checks as a risk management tool. For certain positions, such as those involving financial management or access to sensitive information, employers may want to identify potential red flags that could indicate financial instability or dishonesty. For positions where a high level of trust and integrity is essential, such as in executive roles or positions dealing with confidential information, employers may use these record checks to assess a candidate’s overall trustworthiness.


Compliance and Employment Policies

In some industries, employers may be required by law to conduct bankruptcy or civil checks. This is particularly common in sectors that are heavily regulated such as finance, insurance, or government contracting. Some companies have specific employment policies that mandate certain background checks for all employees, regardless of their role. These policies are often in place to ensure consistency and fairness in the hiring process.

As with every background check, employers should be transparent with candidates about the types of searches they conduct and obtain the necessary consent before initiating these checks. Additionally, candidates typically have the right to dispute and correct any inaccuracies in their background check reports.


Ask Essential Screens about adding bankruptcy and civil record checks to your screenings!


Disclaimer: The resources provided here are for educational purposes only and do not constitute legal advice. Essential Screens always advises you to consult your own counsel if you have legal questions related to your specific practices and compliance with applicable laws.

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