Here at GroupOne Background Screening, we receive daily questions on a number of issues, but one of the most common is if a background check will reveal a Chapter 7 bankruptcy? If so, from how long ago?

The simple answer is, yes bankruptcies can be discovered. While they are often seen as a negative, it also shows you’ve taken steps to get your financial life back in order.

Although you may have endured hard times in the past and are concerned that a future employer will disqualify you as a candidate, according to the Fair Credit Reporting Act, bankruptcies more than 10 years old are not allowed to be on an employee background check.

In fact, government employers are forbidden by law to refuse employment to someone solely because they filed for bankruptcy. This law applies to federal, state and local levels.

Usually, if bankruptcy is the only red flag on your background check, it should not be an issue when getting hired. However, if other flags pop up on your screening in addition to the bankruptcy, then it could be grounds for denying employment.

Private employers do not have the same restrictions, so laws do not forbid them from refusing employment because of bankruptcy.

If you have concerns about what is revealed on your background report, GroupOne recommends you do a check on yourself to see what shows up.

If any red flags appear, including a bankruptcy, you may want to disclose this information to your potential employer at the very beginning of the process. Many employers are understanding and know people can potentially face hardships throughout life.

It’s always best to be a step ahead of potentially bad news, thus discussing your past hardships in advance may be able to save you a lot of headaches.