Perhaps you have made the difficult decision to file for bankruptcy. You may feel a sense of relief that you are getting rid of your unmanageable debt and making a fresh start.
Additionally, although you might know that filing for bankruptcy is a wise financial decision and nothing to be ashamed of, you may still worry about who will find out. A bankruptcy affects various aspects of your life, which could leave you wondering if your employer, landlord or friends will know about it.
Bankruptcy filings are public records which generally means anyone who cares to find out about your bankruptcy probably will. However, this does not mean that everyone will automatically know about it.
Some groups must be legally notified
Certain people or groups are legally required to be notified about your bankruptcy. Your creditors will receive notification of your filing from the bankruptcy court.
This notification helps you, since when creditors receive notice that you filed for bankruptcy, they must stop all collection efforts pursuant to the automatic stay.
Anyone who has co-signed loans with you or is a co-debtor on any of your debts must receive notification of your bankruptcy. This is since your bankruptcy filing could impact their obligations on the debts.
Finally, your bank must receive notice of your bankruptcy, particularly if you owe money to them through a loan or credit account.
These are typically the only parties who must legally receive notice of your bankruptcy filing.
Employers and landlords
One of people’s most major concerns when filing for bankruptcy is their employer finding out. Your employer will not automatically receive notice when you file for bankruptcy.
However, there are some situations where there is a chance your employer will learn of your bankruptcy. One of the most obvious reasons is if you owe money to your employer and they are listed as one of your creditors. They are then legally required to receive notice.
Another reason is if your specific type of employment requires you to report the bankruptcy filing.
For example, jobs that involve the handling of sensitive financial information or certain government positions could have rules mandating that employees notify them of bankruptcy filings. You should review any employee contracts or handbooks to learn if there are any rules pertaining to bankruptcy reporting.
Another common worry is a landlord finding out about a bankruptcy filing. Landlords will usually not find out about a bankruptcy if you are current on rent. If you are behind on rent, your landlord could be listed as a creditor and learn about the bankruptcy.
Finally, anyone who initiates a background check on you will learn about your bankruptcy. Bankruptcy records are usually available through federal and local court records and on credit reports.
Steps to protect your privacy
Do not feel like you need to tell people about your bankruptcy. You are not required to tell your family and friends unless you choose.
Avoid talking about your bankruptcy on social media, even if you use accounts without any personally identifying details. As we all know, sometimes “anonymous” social media posts can be traced back to a specific person.
Finally, there might be ways to seal certain documents or filings related to your bankruptcy if you are truly worried about protecting your privacy. There are often special rules or requirements to this, so discussing your situation with someone knowledgeable is best.
