Monday, September 29, 2008

Who Will Know About My Bankruptcy?

Question: I want to file for bankruptcy, but I don't want my family or friends to know. Can they find out about my bankruptcy?

Answer: The documents in your bankruptcy case, like most court documents, are public record. The bankruptcy court will mail notice of the bankruptcy to your creditors, but there are also people who can find out about your bankruptcy through a variety sources.

People who will find out about your bankruptcy:

  1. Your creditors, co-debtors and others that you choose to notify of your bankruptcy. Your attorney must list all of your creditors in your bankruptcy papers as well as any co-debtors. Anybody else that you choose to include in the mailing matrix will receive notice of your bankruptcy filing.

  2. The major credit bureaus. The bankruptcy will send electronic notices of your bankruptcy to the major credit bureaus as well as Dun & Bradstreet. Even credit card companies that you don't owe money to can see the bankruptcy on your credit report.

  3. Vendors and other advertisers. Vendors and advertisers can purchase mailing lists of new bankruptcy filings. Some debtors have reported receiving solicitations for credit counseling services or even credit card offers that appear to be taken from mailing lists purchased from the court.

  4. Your ex-spouse. When the bankruptcy laws changed in 2005, a new provision was added that requires the Trustee to send a letter to the person receiving child support, advising of the bankruptcy, case number, filing date, creditor's meeting date and probable discharge date. This letter also gives the name and address of the state agency to contact if the child support does not continue being paid.

How people may find out about your bankruptcy case:

  1. Newspapers. Some newspapers publish data on new lawsuits and new bankruptcy filings. Information such as the date you filed bankruptcy could end up in a local news .

  2. Search engines. Some bankruptcy court websites publish court calendar information for upcoming cases. Search engines like Google might pick up this information and it could should up if someone ran a search for the debtor's name.

  3. Courthouse records. Any member of the public can go to the court to review records for free or pay for electronic access to most bankruptcy court records. Some banks like Wells Fargo actively search these records to see if an account holder has filed for bankruptcy.

  4. Your employer. While employers are not typically informed of a bankruptcy, a Chapter 13 trustee could request an earnings withholding order to your employer if you get behind on your Chapter 13 plan payments.

In most cases, friends and family will not find out about your bankruptcy unless you tell them or they happen to stumble across the information online. Nonetheless, the information is publci record and there is no way to prevent someone from discovering that you have filed for bankruptcy.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

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