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Employment Background Checks

With the recent drop in unemployment in Pennsylvania, it is obvious that people are out there applying for and obtaining jobs.  Although the crisis is far from over, I thought this might be a good time to discuss what your potential, future employer can and cannot find out about you.  So, before you head off to that next interview, see the below list regarding the truths and myths about employment background checks:

– Criminal Records:  Your future employer is unable to access your arrest records; however, they will have access to any criminal convictions or matters which are pending trial.  In some instances, summary offenses or juvenile records can be expunged; removing them from a potential employer’s sight.  Pennsylvania’s Unified Judicial System is a good resource for determining what, if anything, is on your criminal record.

– Bankruptcy Filings:  Bankruptcies are a matter of public record, and can be discovered by a potential employer; however, employers are not permitted to discriminate against applicants simply because they have previously filed for bankruptcy.

– Worker’s Compensation Claims:  When an employee’s claim goes through the state system, the case becomes public record; however, an employer may only use this information if an injury might interfere with one’s ability to perform required duties.

– Social Security Number:  An employer will be able to verify your social security number.

– Educational Records:  These records are only seen if there is consent from you, the student. However, a school can release what they call “directory information” which can include your name, address, dates of attendance, degrees earned, and activities you participated in, that is unless you have given written notice not to release that information.

– Military Service Records:  The military can disclose your name, rank, salary, assignments and awards without your consent.

– Medical Records:  Employers do not have the authority to request your medical records and cannot use them when making a hiring decision.  They can however inquire if you have any physical restrictions that may inhibit you from performing a certain job.

– Work History:  Verification of dates of employment and positions held can be obtained.

– Driving Records:  Your driving records are not confidential and can be released without consent.  Specifically, driver information may be requested by employers, insurance companies or agents, attorneys representing you or for use by courts and law enforcement.  However, they are usually not included in the standard pre-employment background check unless you will be driving as part of your job.  A copy of your driving record can be obtained online through PennDOT for a $5 fee.

– Credit Reports:  Under the Fair Credit Reporting Act (FCRA) employers must receive written consent before seeking an employee’s or potential employee’s credit report.  However, if they run a credit check with your consent, it’s best to first check out what they may find.  Click here to obtain a free copy of your credit report today.

Now that you know what an employer can and cannot learn about you, the best way to prepare for your next job interview is to first perform your own employment background check to confirm that your information is accurate.  There are a variety of companies that will allow you to perform a complete background search for a fee; however, much of the information can be acquired by simply following the links provided in this blog or contacting the reporting institutions directly for less than what a company would charge.

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Addressing Defaulted Student Loans

It is drilled into our minds from childhood that in order to have a decent future, we must obtain higher education.  What we aren’t told is what that education will end up costing us.  Like the housing boom of years past, we are seeing a large number of loans being handed out to millions of students with little regard as to whether those students will ever be able to pay back the money they’ve borrowed.  Similar to the housing boom, this trend, and the inevitable defaults that will follow are sure to lead to the collapse of the student loan market.  Unfortunately, unlike mortgages, student loan debt is entitled to serious government protection and in the vast majority of cases is not capable of being discharged through a bankruptcy.  So, what if you are one of the many individuals out there whose loans have gone into default status?

The ramifications of defaulting on your student loans can be significant.  First, once you’ve defaulted, this information will be reflected on your credit report and will have a negative impact on your credit score making it difficult to qualify for additional lending to purchase a vehicle, own a home, or continue your education or help finance a child’s education.  Additionally, after defaulting, you may be placed on the federal tax offset list, which means that instead of receiving your tax refund every year, those funds will be sent to your lender.  Finally, once you default, the government may be able to garnish your wages i.e. withhold a portion of your paycheck (up to 15% of your take-home pay) and apply it to your outstanding balance.  Now for the good news, there are things you can do to help you avoid these consequences.

If you have defaulted on a loan, you are ineligible for some programs that have been established to help people who cannot afford their payments i.e. forbearance and deferment; however, you may still have options.  One such option if you have sufficient income and are concerned with having the default removed from your credit report would be to have the loan rehabilitated.  You can request enrollment into a loan rehabilitation program by contacting your guarantor.  In order to rehabilitate your loans, your guarantor will require that you make between 9 and 12 on-time monthly payments.  Once the required payments have been made, your guarantor will send you a rehabilitation agreement for you to sign and return.  After you have returned the completed agreement, your grantor transfers the loan to a new lender and servicer and requests your previous loan holder and consumer reporting agencies to remove the default entry from your credit report.  The loan is then out of default, and your continue making on-time monthly payments to your new servicer.  Please note that it is important for you to stay on top of your payments once your loans have been rehabilitated because loans rehabilitated after August 14, 2008 are no longer eligible to be rehabilitated again in the event of another default.  But what if you can’t afford the requisite payments to get your loan rehabilitated?

For individuals with limited income who want to address their defaulted loans, you may want to try to have your loans consolidated.  Unlike rehabilitation, consolidation will no remove the default record from your credit report, but you also do not need to make up to 12 monthly payments to qualify.  Instead, to consolidate out of default, you must do one of the following: complete a satisfactory repayment arrangement with your current lender (make 3 consecutive payments) or agree to repay the consolidation loan under the income-based or income-contingent repayment plan.  Currently, the primary consolidation lender is the Direct Loan program, but you can consolidate with any lender offering consolidation loans.

It is important to note that loan rehabilitation and consolidation are remedies available for defaulted federal student loans.  If you have private student loans, you will need to contact your lender and see if you can negotiate terms that will allow you to get your loans out of default.  Additionally, there are pros and cons to each option.  For instance, with consolidation you may repay your loans for a longer period of time or accrue and pay greater interest over the long term.  Moreover, loan consolidations cannot be reversed; therefore, it is important that you carefully review your situation as well as the pros and cons of all possible remedies before entering into any program.

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