Filling for Bankruptcy

[countbat]

A fellow flier has approached me with a question which I considered to be good. What are a pilot chances of finding a job if he/she has to declare bankruptcy? I told him that I will try to get some infos before giving him an answer. Any input/opinions regarding this issue appreciated. Thanks.

 

[bobbysamd]

Bankruptcy

I know of at least one pilot who has filed for bankruptcy. He got a job with the frax. It's a job I wish I could have had, and I have excellent credit!

Hope that gives your friend some encouragement.

 

[countbat]

Thank you. I will let him know. However, I don't see the reason why a bad credit (which could be for many different reasons) should affect somebody's ability to make an existance through his/her trade!? That should be considered personal because nobody likes to be bankrupt on this short life. And most important we live difficult times when everything is very fragile.

 

[HPaul3]

Tell your friend to tread very carefully. If he is considering bankruptcy, his credit is probably pretty bad already. But with all due respect to Bobby, the airlines seem to place a huge amount of importance on a good credit rating. Like obtaining a degree, it indicates a person's ability to follow through with their agreements. Added to this, it could be an indicator of a person's overall emotional picture....if a pilot is consumed by worries about finances or debts, this could take away from that pilot's capacity to handle stress, especially stress in the cockpit. Bankruptcy would certainly not be a positive move, in any case. Are there any other alternatives? It would be my last choice, personally.

Another factor: Maybe Bobby's friend had some time between the bankruptcy and his application to the fractional. Over time, following a bankruptcy, he must have demonstrated financial responsibility. Of course, this takes time. In the near term, bankruptcy could be an absolute disqualifier, but over time its effect could become mitigated.

Other thoughts?

 

[embdrvr]

What a bunch of horse$hit.
How many times have airlines filed for bankruptcy? I agree that a guy stressed out over finances may be distracted in the cockpit. But let's get real. People get stressed out over lots of things. Can an airline determine whether or not your spouse/significant other will soon be caught having an affair? What about a death in the family? How about the countless people forced into bankruptcy over medical bills or bad accountants? I've been pretty lucky. I have great credit and very little debt. I could see not hiring someone in the middle of a BK proceeding but if it's been a while and the person has made good financial decisions since then why should they not be hired?

 

[Gulfstream 200]

I say be careful too....
even corporate operators check everything these days (including credit)
NO, not to say it will disqualify you, but its another thing that can pile up and throw you out of contention!

I certainly dont know your friends delemia, but its plain rediculous when you hear of guys filing bancruptcy over 10-20K in bills or something....bottom line it will cost you more in the long run when you pay huge interest rates for everything you finance etc....nevermind the fact that the rest of US pay for the writeoffs your creditors take!! (Thanks!!!)

Seems like on 90% of these filing the only people who benefit are the lawyers who charge you 300$ to file it...

 

[bobbysamd]

Bankruptcy

Maybe Bobby's friend had some time between the bankruptsy and his application to the fractional. Over time, following a bankruptsy, he must have demonstrated financial responsibility. Of course, this takes time. In the near term, bankruptsy could be an absolute disqualifier, but over time its effect could become mitigated.

Yes, I believe it was several years. Maybe seven or more before he got his frax job. But he had airline interviews and even got on with one, only to be shown the door after a bogus IOE rip.

 

[HPaul3]

Bobby,

With all due respect, I think we can safely assume your friend's case to be an exception, do you agree? After all, in this market, anything can be a discriminator; your high-school GPA, a ticket you had in '96, the slightest FAA infraction.

My point is, I'd encourage the individual to seek other means of financial peace. The bankruptcy would be on his record for a long time, and would auger against his chances for being hired.

I just don't want anyone out there looking for a job to think that a bankruptcy would help them with their job search.

EMB, you may think it's horse$hit, but I don't think you're being realistic about the situation. As you alluded to in your post, the pilot in question would face many years of having to prove himself financially before the effects of bankruptcy would diminish. Unfortunately, none of us makes the rules about this situation. The HR offices at the employers do, and I'm sure if you took a poll, you'd not find one office that would view bankruptcy in a positive way, at least not in the near term. Just my two cents as to the possible ramifications.

 

[bobbysamd]

My point is, I'd encourage the individual to seek other means of financial peace. The bankruptsy would be on his record for a long time, and would auger against his chances for being hired.

I just don't want anyone out there looking for a job to think that a bankruptsy would help them with their job search.

No way can it help. I agree 100%, and also with the various discriminators you mentioned. Anything negative, or perceived as a negative by the brilliant minds in HR, can be a detriment.

I think that it depends. A recent bankruptcy would be extremely harmful. A bankruptcy long ago may be less harmful, especially if it was a business bankruptcy and not a personal bankruptcy. Of course, getting an interview and the chance to explain it in person will help.

 

[countbat]

Let me get this straight. We have people with no jobs for about 2 years by now. Outside aviation is not too rose either. So if a pilot wants to find a job in a different field the answer will be NO for lack of experience in that field plus due to the state of economy where nobody can complain of employees shortage. After 2 years with no job, with bills, mortgage, children to feed should I assume an a$%hole HR guy would say that pilot is not viable for his company.
It looks to me like an Enron syndrom. Catch 22. The employee is at fault for the managers mistakes. The managers go further with money and better jobs and the employee can not find a job because he used to work for a company such as Enron.
I know life is not fair but to say it sucks is kind of too much.
It's like blaming a cancer sick pacient for being sick.

 

[fluther]

Whether we agree or not the fact is that any employer worth working for will check your credit. Lets face it, if a speeding ticket can be a problem, dropping the bag on your creditors will probably not look to appealing to a potential employer, especially in this pilot rich environment.

 

[quigs]

I can't believe that we have gotten to the point of letting employers pull credit checks. I still can't believe we let insurance companies get away with it. When does it stop? I can understand if you are applying for a CEO position or if you are applying for a very important high security job, but come on, a 18k a year position? I interviewed for a regional carrier that wanted permission to pull our credit, however they said that wouldn't happen just a process they had to go through. I think some companies need to step up to the big moral picture themselves. the same companies that emphasis honesty, hard work, and a clean record, need to look into the mirror. I do not think it is anybody's business what my credit looks like, with the exception of someone who is willing to lend me money, or have me be in charge of their money. As far as someones mental health when they are filing bankruptcy, that depends on the person and I would think they would be greatly relieved instead of stressed out to the gill. Yes, credit is a privelage and shows responsibility, but also take a look at the creditors and their predatory lending. They are just as bad as someone who doesn't pay their bills, worse in my view, they lead to it. Also get a little taste of a collection agency and see how ethical things are on that side of the fence. I could go on and on. If a company wants to not hire me because of my credit, then so be it.

 

[B190Captain]

Unfortunately, it's what these HR pencil pushers want for a candidate in most cases.

Good Credit status is hard to achieve these days but bankruptcy should be treated as a last resort. I am sure they will take under consideration the fact that one may be on the street laid off from another flying job and trying to pay your commitments has become a nightmare. I am sure that alot of people out there without a job are watching their credit slipping into the abyss. But don't jump the gun.

Debt consolidation through some of these non-profit organizations may be able to help. It does reflect on your credit since you involved a third party but not nearly as bad as a bankruptcy.

Good Luck!!

 

[80/20]

I would try very hard to avoid Bankruptcy if I could.
It's a red flag. We can discuss how fair and correct that judgement is but many interview board members does not like it at all.

 

[JediNein]

Howdy!

http://www.debthelp.com (A how to get out of the smoking crater site -- send emails to my addy for the free content stuff)
http://www.budhibbs.com (Free book on debt/collection agencies/bankruptcy, plus author is willing to answer questions via email)

A few letters sent certified mail will stop the phone from ringing.
If the phone continues to ring ANY lawyer will happily take the sure-fire win as the collection agencies are violating the Fair Credit and Collection Act.

Let your friend know that the phone calls can stop. Any harassment, ESPECIALLY at work, is illegal and can be stopped. It doesn't take a lawyer to stop these jerks either.

Once the *** phone stops ringing, your friend might have a clear head and be able to think better.

A personal bankruptcy is not a fresh start. It allows any company to deny employment, if the job pays over $20,000 a year (almost all pilot jobs).
The information is on the credit report for 10 plus years. A chapter 11 is outright stupid, 12+ years PLUS having to pay the creditors anyway. Just walking away from unsecured debts is only reported for 7 years.
Interest rates for any other extensions of credit will be much higher for decades. It's debt prison.
Bankruptcy won't stop a home in foreclosure. There are ways to sell the home without a foreclosure or the wait.
CCS is almost a bankruptcy and does more harm than good.

Good luck!
Jedi Nein

 

[Timebuilder]

A friend working on his private happens to be a leading banckruptcy attorney.

You may find that several calls to debt counselling services, which used to be rather altruistic and helpful, may reveal that the low or elimiminated interest rates touted on TV are not avialable to most people, and a large payment (10% per account) may be required to begin a "payment plan". If you can't keep up with the mounting bills, then how are you going to come up with a 10% down payment for a plan? You aren't.

The worst thing is to do nothing, letting you bad credit fester as though you didn't care, when you only feared banckruptcy.

While the Trumps and the airlines can declare, you and I will suffer discrimination, legally.

Which is worse: a banckruptcy, or bad credit for the next 25 years? You decide.

 

[roughneck]

Bankruptcy will be look at as a sign of irresponsiblility. You may get a job, but if their are two pilots with identical qualifications and it comes to light that the other has filed before then it is not hard to decide who will probably get the job.

 

[BobbyB]

I agree with most of the above. Bankruptcy is NOT the way to go if you can help it. Cut up the credit cards, talk to creditors yourself and try to work something out. The important point for most of us is that we want airline jobs. I'd love to go into an interview with the other guy having fewer ratings and hours, and if he'd declared bankruptcy, then all the better for me. It is just one more way to stand out (or stick out). As far as saying that it is a double standard for airlines and the like to be able to do it, and not us; let it go. If our sorry bankrupt individual asses had the ability to generate billions of dollars in cash flow each year, and had billions in assets (even in bankruptcy), then you have something to work with. We as individuals don't have a lot to go on when our only value is flying airplanes or flipping burgers. I am also a bit skeptical of "predatory" lending. There are laws (truth in lending act, for one) that requires lenders to disclose in plain terms the amount that is being charged in both % and in $. If you are stupid enough to borrow more than you can pay, oh well. Of course there are exceptions, and there are predators and they should be held accountable to the max of the law. Most of our grandparents actaully saved up money before they bought something and it worked out pretty well, even in the depression. Probably not a bad idea.

 

[B190Captain]

I remember one time I was in a bind with a CC company and I asked them if I could work something out with them temporarily. They said NO.

When I paid that card off recently I snipped the card and closed the account. When the rep asked me why I wanted to close I told them that same story.

 

[JediNein]

Just a gentle reminder, BobbyB

Sh!t happens. Someone who has very carefully planned their budget, has payments that are only 20% of their net income, has 15% of their income going to savings, and a tiny total amount of debt can be financially ruined in just a year.

Lose a job. Not really that big of a deal, except savings run out in 3 months, and unemployment makes that debt 40% of take-home income. Be 2 hours late on a payment because the credit card company is First USA and it takes a class-action lawsuit to stop their intentional holding of payments until after the deadline, and the nice 6.99% rate goes to 25.99% overnight. 80% of take-home just to make the minimum payment.

Lose a job because of disability. Medical bills start piling up. Pay the car payment or pay for surgery? Make the house payment or make the chemo payment. Get a second opinion because you missed the credit card payment. Disability insurance really doesn't cover that much.

How many weeks are any of us from complete financial ruin if the work/unemployment checks stop?

Fly SAFE!
Jedi Nein

 

[Timebuilder]

Let's continue the list of possibilities.

Suppose you are an instructor who works as an independent contractor (as all of the instructors at your school are) and your job goes to h*** after September 11th. Because you are not an employee, you are eligible for ZIP money from unemployment. All of the bills continue, and no money comes in. You find a job in May. You sell your seven year old car and start driving a 14 year old car. You still don't have the money to service your debt and still be able to afford ramen noodles. Your prospects for an increase in income are over a YEAR away.

Then what do you do?

I'll tell you what you do. You take experienced legal advice, just like Trump, United, US Air, etc. The only difference is that these are ficticious legal persons, and you are not.

And then, you go on with your life.

 

[BobbyB]

No Doubt, Jedi

Jedi, I was commenting on two things. One, avoid bankruptcy if at all possible. Secondly, others above were lamenting the fact that the airlines can file bankruptcy and then discriminate against potential employees if they have filed. My point is that the difference between me and an airline is that all I do is fly planes, they generate billions in revenue and thousands of jobs for turds like me, even in bankruptcy. I can come up with a ton of ways to go bankrupt. You are right, I, like most of us are a few months without a job away from bankruptcy.