A common question I receive is: “Will people find out if I file bankruptcy?” This post details who will find out about your bankruptcy, and who will probably never find out about your bankruptcy (unless you first disclose this fact to them).
A bankruptcy filing is a public filing; it becomes part of the public record. However, it is difficult for the average person to access this record, and even difficult for many attorneys to access this record, unless they practice in bankruptcy and/or the federal court system. So, who will find out that you filed bankruptcy?
First, your creditors will find out you filed bankruptcy; this is a given. We file bankruptcy for relief from our creditors. Second, any co-borrowers or co-signers will receive notice of our bankruptcy. Co-borrowers’ or co-signer’s will be affected by our bankruptcy; we will usually no longer be financially liable for the debt these individuals co-signed — therefore, notice must be provided. Third, if we have a domestic support obligation (child support, spousal support, etc.) that claimant, or person who receives these payments, must receive notice of the bankruptcy and special notice must be made to the trustee in such cases (see DSO Form post). Third, the credit bureaus will receive notice that we filed bankruptcy via the creditors we list in our bankruptcy. Our credit reports will, then, report that we filed bankruptcy. Fourth, prospective lenders of credit and car loans will discover we filed bankruptcy – as soon as you file bankruptcy you will receive applications for credit cards and car loans. Lenders will use the bankruptcy court’s database to establish new business.
Your friends and family will most likely never know you filed bankruptcy unless you inform them first that you have. The newspaper does not print the names of people who filed bankruptcy. To access information regarding who filed bankruptcy, a person would need to go down to the bankruptcy court to search names (this is no easy task); or, have access to the bankruptcy court’s database, which is not granted easily (generally you must be an attorney or creditor).
Therefore, when I am asked “will anyone know I filed bankruptcy,” my answer is: creditors, the court, co-borrowers, claimants of domestic support obligations, but hardly ever any friends or family. Rest assured, although bankruptcy is a public activity, few people will know if you file bankruptcy or not. And in fact, I am certain that you know at least three people (if not more) who have filed bankruptcy, yet you are unaware that they have filed bankruptcy.
If you are interested in bankruptcy and would like to learn more about the process, please call today for your free in-office bankruptcy consultation.