Are you ready to file for bankruptcy but stressed out because you’re not sure who will find out? It can be hard to pinpoint who will figure out or actually find out about your bankruptcy. But there are some basic rules of thumb. Before you file, it’s not uncommon to want to know the answer to the following question. Who will find out if I file for bankruptcy?
Creditors and Landlords
The only people who will be notified by the bankruptcy court will be your creditors, those persons or entities to whom you owe money. This is an important part of your bankruptcy because you want your creditors to cease all collection efforts and to properly report your debt as discharged.
If you file a Chapter 7 and have an active lease (not month-to-month, but still within the lease term) then you have the option in your Statement of Intention either to reject (terminate) or assume (reaffirm) the lease. Your landlord in these situations will be notified by the bankruptcy court because they have an active interest in your Chapter 7 bankruptcy.
If you file a Chapter 13, the trustee will send a wage order to your current employer’s HR Department for automatic withdrawal of your Chapter 13 plan payment from your paycheck. In the vast majority of cases this is not a big deal and easily administrated by most employers.
Prospective Employers or Creditors
Your bankruptcy filing will appear in your credit report for 7 to 10 years, and many employers run credit reports prior to making a job offer. This is especially true for jobs with financial or fiduciary responsibilities. In many cases, an explanatory letter from your bankruptcy attorney can mitigate any concerns potential employers may have about your bankruptcy. Remember that the more time passes after your bankruptcy filing, the less impact it will have on your credit.
Friends and Family (But Only if You Tell Them)
In most cases, your friends and family will not know about your bankruptcy filing. Unless you owe a person money (who must then be listed as a creditor) that person will not receive notice from the court. Of course, you may always choose to confide in someone close to you. Nothing prevents that person from telling others. For some people, filing for bankruptcy is a tough, emotional decision. In most cases, it makes sense to talk about it with someone who cares about you. At the same time, be careful about whom you tell if you don’t want everyone to know.
Who Will Find Out if I File for Bankruptcy?
Only creditors, landlords (in Chapter 7), employers (in Chapter 13) and prospective employers or creditors. Your bankruptcy filing will not be published in the newspaper or made available online, except through Public Access to Court Electronic Records (PACER). A person would have to actively search for you, personally, to find your case. And your bankruptcy attorney is bound by attorney-client privilege and will disclose your filing only to necessary parties.