Will my family and friends know about my bankruptcy?

Bankruptcy Filings are Public Record

Well, not really. Bankruptcy is not private, it’s a matter of public record. Anyone who looks hard enough will find out about your bankruptcy. However, as a practical matter, your family and friends are unlikely to find out you’ve filed bankruptcy unless you owe them money.

The Bankruptcy Discharge Requires Sending Notice to All Creditors

When a bankruptcy case is filed, notice is sent to all the debtor’s creditors. As part of the disclosure process, you’ll be required to tell your bankruptcy attorney and the court about all your assets and debts. If family and friends are creditors, they’ll show up on your bankruptcy papers and the court will send them documentation of your bankruptcy. DO NOT attempt to pay back family members before bankruptcy thinking they’ll be kept in the dark. If you choose this route, they’ll find out about your bankruptcy via a lawsuit rather than the more harmless court notice.

Notice of Bankruptcy Goes Out to All Lenders

Even if you plan to keep your home, notice of your bankruptcy will go out to your mortgage lender. Similarly, all your credit card accounts will find out, and no, you can’t leave a credit card out of bankruptcy unless it has a zero balance. Also, be aware that co-signors of loans are entitled to receive notice of your bankruptcy, regardless of whether you intend to continue making payments.

What About My Employer, Will They Find Out About My Bankruptcy?

Will your employer find out? Maybe, if they request a copy of your credit report. Otherwise, chapter 13 plan payments made by payroll deductions will, at the very least, put the payroll department on notice that you’re in bankruptcy.

Before you go and get your shorts in a knot worrying that everyone will know you’ve filed bankruptcy, stop and take a deep breath. Is it really that big of a deal that people find out? Sure, maybe you don’t want to take out a billboard broadcasting it to the world, but your friends and family? Rather than living in secret, you could use them as a support system to help you through this difficult time. In any event, as long as you don’t owe them money, your friends and family are very unlikely to find out about your bankruptcy filing.

Do you know what PACER is? Neither do they, relax, you’ll be fine.