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Typically it would be more favorable to obtain a discharge of outstanding debts through bankruptcy. An employer may discriminate against an employee on the basis of financial instability but may not discriminate on the basis of having filed bankruptcy. Therefore the employer may lawfully discriminate against you if you work out a payment plan but may not if you file bankruptcy.
Here is the language of the Bankruptcy Code "No private employer may terminate the employment of, or discriminate with respect to employment against, an individual who is or has been a debtor under this title … solely because such debtor … is or has been a debtor under this title…." 11 U.S.C. sec. 525(b).
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So, in your eyes, it would be better to file as oppose to try to settle my debt for less then what I owe? If/when an employer pulls my report, would they be able to see a 100-word statement that I am legally allowed to add to my credit reports? I would like to mention that the bankruptcy was due to excess medical bills while uninsured and not because of bad spending habits. In your experience, how hard is it for a person who has just filed to land a new job? Is getting a waitress or simple cashier job out of the question? Thank you :)
I apologize for the delay – I was taking a short break when you responded
So, in your eyes, it would be better to file as oppose to try to settle my debt for less then what I owe? CORRECT If/when an employer pulls my report, would they be able to see a 100-word statement that I am legally allowed to add to my credit reports?CORRECT I would like to mention that the bankruptcy was due to excess medical bills while uninsured and not because of bad spending habits. In your experience, how hard is it for a person who has just filed to land a new job? NOT HARD AT ALL Is getting a waitress or simple cashier job out of the question? THEY SHOULD NOT BE A PROBLEM Thank you :)
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Why would settling my debt for less that what I owe be worse then bankruptcy?
Because you would not have the protection of the antidiscrimination clause that the bankruptcy code provides
But if that says on my record for 10 years, would I not be able to increase my score much faster if I settled? Also, could not an employer still see the bad credit that preceded the bankruptcy and discriminate using that?
Yes it will stay on your record for 10 years. The employer cannot discriminate on the basis of the debt that was included in the bankruptcy. This is my opinion based upon my experience. However the choice is yours
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