It is a little known fact that a federal law, which is applicable in Arkansas, forbids discrimination against someone who has a completed bankruptcy on his or her record. The protection applies to job applications, requests for student loan benefits or other applications for public or private benefits made by an individual with a bankruptcy discharge. However, the federal law provides more protection against discrimination when seeking assistance from government agencies than it does when pursuing private assistance.
Each case of potential discrimination, be it with respect to a private or public entity, should be questioned by the individual. When a question occurs on this issue it may be beneficial to consult with a bankruptcy attorney to obtain a full range of information and to discuss options available. With respect to government agencies, they cannot terminate public benefits, evict a person from public housing or deny a driver's license to someone who has a successfully completed bankruptcy.
The government also must continue to give a person equal access to doing business and performing contracts for the government. A public agency cannot prohibit a person from participating in a state home mortgage program. In addition, a governmental agency or an entity that has government backing cannot prohibit a person with a bankruptcy from qualifying for student loan benefits.
In general, creditors in Arkansas and elsewhere will look at a number of factors before determining whether to grant credit to someone after bankruptcy. Some factors include whether the person has a current auto loan, an ongoing current mortgage loan or credit cards that are being paid on time. One's current ability to handle debt, as reflected in a credit report, and the historical record that it contains, is more important than a past bankruptcy. It is also a known fact that many creditors prefer to deal with people with recent bankruptcies because they will be prohibited from filing again for the next several years.
Source: foxbusiness.com, "Will a Bankruptcy Stop Me From Getting Student Loans?", Karin Price, Jan. 21, 2015