Facing Bankruptcy? Contact Walker & Walker Law Office
Worried that your friends, family, colleagues and neighbors will know?
Bankruptcy used to carry a series of negative connotations when it came to a person’s reputation.
However, like other legal issues such as divorce, the stigma of bankruptcy is not as serious in these modern times.
In fact, very few people will even be able to tell that you filed bankruptcy.
It doesn’t show up in Google Searches, and doesn’t get published in the Star Tribune, or other Minnesota newspapers.
So who gets told when you file for bankruptcy?
The good news is that much of those who will know are only those that you tell.
The law only requires a small group of parties to be informed of a bankruptcy.
So, the question you want answering is “who will know about my bankruptcy?”
Who Is Required to be Informed of your Bankruptcy?
The most obvious party that will be informed of your bankruptcy is your creditors.
When filing bankruptcy, you will compile a list of creditors who will be informed as they need to put an automatic stay on your debt, which means that all creditors are required to stop their debt collecting activity.
Your lawyer is required to list everyone you owe money to.
Surprisingly enough, you have to tell companies that have nondischargeable debts too.
For example, you must tell student loan companies that you are filing bankruptcy, even though the student loans don’t go away in bankruptcy.
Child support recipients and any co-signers or codebtors must also must be told about it.
Who Else needs to be told?
The unfortunate reality is that there are some parties you may not want to inform of your bankruptcy, but it may be necessary.
For example, you may not want your landlord to know that you are filing for bankruptcy, but if you are behind on your rent, your landlord is suddenly also considered a creditor.
While the automatic stay can give you some time, your landlord will still need to be informed and they could chose to evict you after bankruptcy, but cannot so so during.
Aside from creditors, there are some instances in which your employer will need to know of bankruptcy filings as well. If you are filing for Chapter 13 bankruptcy, your repayment plan may require that payment be deducted from your wages.
This would mean that your employer would be alerted to your bankruptcy for the wage garnishment.
However, depending on your profession, how you manage money outside of employment will likely not have an affect on your career.
Bankruptcy is Public Record
While only your creditors and potentially your employer will need to be notified specifically that you filed bankruptcy, the fact that you did file is saved on a website called Public Access to Court Electronic Records (PACER).
Searching PACER is hard, however, so only lawyers do it.
In order to search if someone has filed bankruptcy on PACER, the searcher has to pay money and make a user name and password.
The good news is that, if we are honest, most people don’t care.
If you are a prominent member of the community, it could be an issue that you wish to prevent.
In these cases, you may be able to file in another district, but that sort of subterfuge can be just as damaging, if not more so.
Some very small papers may seek to take advantage of it. However, most newspapers find there are too many bankruptcy filings in their town.
And their readers? Well, they just don’t care.
It is more newsworthy and interesting to see business bankruptcies in the paper as it will affect a larger part of the community, but your personal bankruptcy is unlikely to show up in the newspaper.
What about your credit report?
There is also one other potentially problematic way that others could find out about your bankruptcy – your credit report.
Bankruptcy will stay on your credit report for 7 to 10 years. You are permitted to attach a statement explaining why you filed for bankruptcy, but it will still be considered a black mark to many.
This means that anyone who will run a credit report for any reason will be able to see that you filed bankruptcy in the past.
Even though filing for bankruptcy doesn’t have the same stigma that it used to, many people are still reluctant to file bankruptcy in Minnesota, even if they really need our help.