Who will know about my bankruptcy?
People often worry about others learning about their bankruptcy. Although bankruptcy records are public records, they are generally not available to the public at large and are not available through simple internet searches. A bankruptcy record can be obtained using the PACER system administered by the United States Courts. PACER is a pay as you go system. Since you have to pay for each record searched, most non-lawyers don’t go to the effort to set up, use and pay for a PACER account. Although some local papers have been known to report bankruptcy filings, I am not aware of any in our area that do so. If you are concerned about this, look through your local paper under the Public Notices section to see if any bankruptcy filings are reported. My guess is that you probably will not find any.
If you are famous
If you are a famous celebrity, or have a high profile in your community, the news will probably pick up on your bankruptcy and the details of the case can be reported. Unless you enjoy the level of fame and celebrity of Donald Trump, Mike Tyson or Dionne Warwick, this is not likely to happen. For those of us who are not famous celebrities, the local news outlets are not likely to learn about or report your bankruptcy.
Current creditors will find out about your bankruptcy filing
As part of the bankruptcy process you are required, through the court, to notify everyone you currently owe money to. This is actually good for you since you want these creditors to be aware of the automatic stay so they stop any collection efforts against you. If you owe money to a relative, a friend or your employer they will most likely need to be notified as part of the bankruptcy process.
Anyone who has filed a lawsuit against you will also be notified. Of course, this works to your benefit in most collection lawsuits you are trying to stop.
Co-debtors will find out about your bankruptcy filing
Anyone who is a co-signer on a debt you owe will be given notice of a bankruptcy. If you have such an arrangement with family or a friend, it is typically best to let them know that you have filed bankruptcy before they get a notice from the court.
What about my hearing?
Although your appearance at the first meeting of creditors (341 hearing) is public record, these meetings are generally only attended by lawyers, their bankruptcy clients, and occasionally creditors or their representatives. In other words, everyone at this meeting is generally in the same boat as you, or is directly involved in your claim, such as one of your creditors or the bankruptcy trustee.
Credit reporting agencies will have and report information about your bankruptcy. Chapter 13 bankruptcies can show up on your report up to ten years. For many, a bankruptcy may actually clean up your credit reports. At the time of filing, many individuals already have credit reports showing multiple delinquencies and large debt balances. Debts that are discharged by the bankruptcy are no longer a drain on your income, and are reported as a zero balance. Despite the length of time bankruptcy remains on your credit report, most individuals are able to rebuild their credit within a few years of filing. Of course anyone who has permission to check your credit will have access to this information. This may include prospective employers and landlords.
Will my current employer find out about my bankruptcy?
Many worry that their current employer will find out about their bankruptcy and will treat them differently because of it. If your wages are currently being garnished your employer will be notified of the bankruptcy in order to stop the garnishment. Private and governmental employers may not fire or demote you solely because of a bankruptcy. Bankruptcy discrimination with respect to public benefits, and public housing is also prohibited. Similarly, lenders cannot exclude you from government guaranteed student loan programs based on your bankruptcy filing. If a wage order is used in a Chapter 13 to send part of your wages to the Trustee, your employer will also learn of that.
Many employers do not care whether you have filed for bankruptcy. Some even welcome it since they know that you can concentrate on your money problems are dealt with in bankruptcy. Often times, employers are already that employees are experiencing financial difficulties.
Confidentiality at my office
I take your confidentiality seriously. Rest assured that my office will not share any information about you or your bankruptcy with anyone outside of those required as part of the court process. Unless you tell anyone about your bankruptcy, only those in the select group mentioned above will ever have a reason to know about your bankruptcy.