In Bankruptcy Information, Bankruptcy Questions

This is always a big question on people’s minds when they finally make the decision to file bankruptcy. Who should they tell? Who must they tell? Who will find out and how?

How Many People Know?

The number of people who know you filed bankruptcy is probably larger than you are aware, but much smaller than you imagine. A bankruptcy is a public record, meaning anyone can find out. And there are a few specialty publications or websites that list recent bankruptcy filings. But the news isn’t published in the local newspaper. If someone knows where to look they can find out but it’s not like they’ll turn on the local news and see a story about someone filing bankruptcy unless that person is a high-profile celebrity of some sort.

Who Must Know?

Obviously creditors will know a bankruptcy has been filed. That’s the point: to give them notice so they quit hounding you. Filing bankruptcy will show up on a credit report. It will stay there for 10 years. But if a person’s credit is bad enough that bankruptcy is the only option, the credit report is pretty much toast anyway. Filing bankruptcy creates a clean break between the financial past and the future. It’s what comes after filing that matters.

Who Else?

Beyond creditors there is no obligation under the Bankruptcy Code to tell anyone about filing. A landlord won’t get notice unless the debtor is behind in his rent. Employers won’t be told. Neither will family. Who and how a person tells others is up to them. Years ago there was a stigma attached to bankruptcy, much like the stigma that attached to divorce. I remember my parents taking me aside one day years ago and telling me that a neighbor had to file bankruptcy but we shouldn’t treat them any differently. Nowadays bankruptcy, like divorce, is one of those things that happens occasionally. You might be asked on a loan or job application in the future whether you’ve ever filed.  You don’t have to answer that question, but your application might be rejected if you don’t. If you answer, you should answer truthfully.

If you find that you have to file bankruptcy, treat it as one of those cases where bad things sometimes happen to good people. But don’t let embarrassment keep you from getting relief that bankruptcy provides. If you have bankruptcy questions or concerns, please contact us. You can email steve@schamberslaw.com, or call or text (801) 413-3708.

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