Credit issue...How much will this effect a 121 career?

Rotor2Wing

Rotor2Wing

Unapologetically American
My local bank was one of the many banks to fail in past couple of years. The bank was bought out by another bank which is reviewing all outstanding loans. I had business loan in good standing with the bank that failed. The loan came up for renewal this past year. The "new" bank has been reviewing my renewal application for over 9 months and has decided that in their best interest they will need the full amount of the balance to be paid and will not renew the loan. The loan is over 100k so paying it off is not an option. I have perfect credit with not even a late payment ever! I met with a bankruptcy attorney and he advised me not to file and let them take it since I have zero other issues credit wise. The bank honestly has no where to turn as I have been smart enough since I knew this was a possibility when the local bank failed to take everything out of my name that they could file a lein on.

So since I have no options really how will this effect me being hired at a 121 carrier? With one quick look at my credit report they could see I have zero other issues and have been responsible my whole adult life with my finances. Thoughts?
 
I have no advise, but I find it laughable that the same 121 carriers that have filed bankruptcies, some multiple times, fail to understand how someone can get into a jam.
 
I've wouldn't worry about it. I've never heard of anyone having a credit check run on them as a prerequisite of employment. Even if one were run, I couldn't imagine much weight being given to it.

Keep in mind that many new pilots "following the dream" (with $100K+ debt and lucky to obtain a $25K/yr job) are essentially bankrupt, but don't know it yet.
 
Is a credit check a part of most 121 hiring processes? If so, the fact that there's a lot of spikey haired, iPod and backpack wearing FOs with a lot of college and training debt means that their criteria can't be all that strict.

Edit: looks like the previous poster beat me to it.

In any case, sounds like you have a good attorney. Do not file on what might happen, but on the facts in front of you. The bank has said that they won't renew the long but as of yet it sounds like they haven't come after you for it. I would go out and look for some other cheap financing that you can line up, perhaps even at a better rate, and make them an offer if they ever come to you. Check out some of the resources at www.daveramsey.com if you need any more help.
 
What kind of loan was it? Did you have a contract with previous bank that had a set fixed term it was to be paid back at? If you did the new bank can't breach that contract. Also have you tried to get another bank to give you a loan to cover what they want from you. Remember the court can rule that the settlement comes out of future wages if they take you to court. Don't expect it to just go away
 
chrisdahut1 said:
I've wouldn't worry about it. I've never heard of anyone having a credit check run on them as a prerequisite of employment. Even if one were run, I couldn't imagine much weight being given to it.

Keep in mind that many new pilots "following the dream" (with $100K+ debt and lucky to obtain a $25K/yr job) are essentially bankrupt, but don't know it yet.
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The cargo outfit that I work for requires this for anyone that handles "secure documents". Pilots, drivers, rampers, etc...
 
TallFlyer said:
Is a credit check a part of most 121 hiring processes? If so, the fact that there's a lot of spikey haired, iPod and backpack wearing FOs with a lot of college and training debt means that their criteria can't be all that strict.

Edit: looks like the previous poster beat me to it.

In any case, sounds like you have a good attorney. Do not file on what might happen, but on the facts in front of you. The bank has said that they won't renew the long but as of yet it sounds like they haven't come after you for it. I would go out and look for some other cheap financing that you can line up, perhaps even at a better rate, and make them an offer if they ever come to you. Check out some of the resources at www.daveramsey.com if you need any more help.
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Well the biggest issue with going with another bank is the collateral for the loan is land and its worth about 1/2 of what the loan balance is now. At the time of the loan it was worth 150% of the loan value.

Inverted25 said:
What kind of loan was it? Did you have a contract with previous bank that had a set fixed term it was to be paid back at? If you did the new bank can't breach that contract. Also have you tried to get another bank to give you a loan to cover what they want from you. Remember the court can rule that the settlement comes out of future wages if they take you to court. Don't expect it to just go away
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Thats the issue the loan was set up on a fixed note that comes up for reneal every few years. Its ready to renew again. I had been doing this for a long time with the other bank basically keeping the loan as a line of credit as it was paid down. I know of no less than 20 people they have done this to so far. One of my friends lost everything he had because of it.

Thanks for all the replies! I really hope its not an issue. I too find it funny that an airline would dare judge an employee about finances.
 
I forgot to add that even though this loan is now listed as 6 months past due on my credit my score is still in the high 600s.
 
Absolutely do not file bankruptcy. Assuming the loan is on behalf of an LLC or S-Corp, if they want to call the note, let them. You can always explain later on that it was business debt and not personal, which will buy you something with most bankers.
 
In Georgia you're looking at a six year SOL. You should review your contract very carefully, especially any arbitration agreement. It might help if you have some documentation to show that some of the funds have gone to a personal use, as consumer debts have favorable laws.

Some things to look into might be chain of custody. Since this bank bought the debt from another bank, it's highly likely that they don't have legitimate paperwork to prove the sale if it comes to a court case.

Often, banks sell their debts for a couple of cents on the dollar to a collection agency who will then come after you. If this happens, and you spend some time researching, you can fight back and probably walk away.

Debt collection attorneys were bottom of their class at law school, and I have enjoyed educating them in the past!
 
A lot of small business loans are tied to people's credit - I worked in equipment leasing I tied a lot of people up with it. I do not think your credit score will be too closely analyzed, but why don't you call the managing director of the bank up and organize a meeting.
 
I_Money said:
A lot of small business loans are tied to people's credit - I worked in equipment leasing I tied a lot of people up with it. I do not think your credit score will be too closely analyzed, but why don't you call the managing director of the bank up and organize a meeting.
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If credit scores came into question for keeping an airline crew job, we would instantly have a real pilot shortage...

Talking to a manger at the bank can't hurt. Probably will not change much, but can't hurt. My sister is a banker, they call loans all the time, even when contractually they shouldn't - because their risk people tell them to and they can get away with it. Normally, this means telling you to refinance at less favorable terms, or finding some technical way to consider you in default.

But do keep your lawyer around...

In my business, credit scores are super important - ALL employers, and each individual customer wants to see them.. I actually was fired from a job once when my score was below 700 briefly. Fair? Not really. But that is how it is.
 
drunkenbeagle said:
In my business, credit scores are super important - ALL employers, and each individual customer wants to see them.. I actually was fired from a job once when my score was below 700 briefly. Fair? Not really. But that is how it is.
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Any chance you could elaborate on this beagle?

I see this as a huge problem. 80-90% of credit reports and scores are inaccurate or have errors. I would also think that being in an economic depression some people would understand being late on some payments Hmm...there I go again with the wishful thinking....
 
drunkenbeagle said:
In my business, credit scores are super important - ALL employers, and each individual customer wants to see them.. I actually was fired from a job once when my score was below 700 briefly. Fair? Not really. But that is how it is.
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Really. What kind of job fires you for having a score under 700, even briefly? And if it was briefly, how did they know? Did they check your score every month? I'm not saying I don't believe you, because I do. But it just seems extremely ridiculous.

And how can they justify that? Everything I've ever read or been told says that even between 600 and 700 is "good".

Sounds like you might have had a case for a wrongful termination lawsuit.

I can't think of any job that would have a requirement to have a credit score of over 700, at all times. WTF.
 
I do appreciate the help! I will for sure be fighting fire with fire on this one. This bank has ruined many lives in my area with these tactics. To make it even worse the gov't is assuming a lot of the default debt so the bank loses nothing for calling these loans.

I feel in this situation if it were brought up in an interview I could explain it well enough for it not to matter much. I hope!
 
Not that I know anything about banking or your situation, I wouldn't worry about a 121 carrier even looking at credit. I've been to several 121 interviews, and not once was credit talked about, nor have I ever seen a form saying they check credit. Am I right in saying that when someone checks your credit for a potential job, they are suppose to inform you? I'm under the impression that since you won't be handling any cash, they wont do a credit check.
 
Take care of your credit.

Mine was checked during the Southernjets background check. Funny thing is that there is also a part of the FOM that mentions being in good financial standing — but it's not like they're going to call me in for skipping out on paying for $100,000 in Hello Kitty merchandise. So it basically reads like if your creditors start making repeated inquiries to the company, they're going to counsel and fire yo' ass because it is "grounds for termination".
 
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