Who Will Know I’ve Filed for Bankruptcy?

Even in this day and age, bankruptcy, to some people, carries a negative stigma. Many people fail to recognize bankruptcy as a tool to help people get out of debt and they assume that only “a certain type of person” files for bankruptcy. And in many of these cases, because they assume bankruptcy is bad and something of which to be ashamed, they avoid filing and cost themselves far more than necessary.

The good news is even if you can’t get over bankruptcy being something negative, you can rest easier knowing that not that many people will know you’ve filed unless you choose to tell them.

Bankruptcy and Transparency

Bankruptcy is a matter of public record, so it’s possible for people to find out you’ve filed for bankruptcy. But in reality, how many people do you know who will check court records to find information on you? The people in your life who truly care about you, and even those with whom you have only a professional relationship, are not going to spend their days scouring court documents to see if your bankruptcy pops up.

There are exceptions to this, of course. If you apply for a job it’s possible your potential employer will look into your financial history. And if they choose to do so, they can find out that you’ve filed for bankruptcy. The good news? Very few employers bother with this type of investigation.

And if you’re concerned your existing employer is going to check up on you, you can all but dismiss this concern. Furthermore, there is no official notice sent to your employer when you file. As a matter of fact, not filing could reveal your financial secrets faster than filing because your employer will be notified if your wages are garnished.

There are a few exceptions you need to know about. If your employer must be listed as a creditor, they’re going to be notified of your bankruptcy, as is the case with the rest of your creditors. And if you’ve established a Chapter 13 repayment plan and you miss a payment, the bankruptcy trustee can send a notice to your employer to garnish your wages. Keep up with your repayment plan and this won’t be an issue.

Filing for Bankruptcy Cannot Threaten Your Job

What’s the worst that can happen if your employer does find out you’ve filed for bankruptcy? Nothing more than a little unwarranted embarrassment. Your job is protected and you cannot be fired for filing for bankruptcy. Your employer can consider your financial responsibility if you’re up for a promotion, but you cannot lose your current job just for filing for bankruptcy.

To learn more about bankruptcy and your career, check out this article from WorkplaceFairness.com.

If you are ready to discuss bankruptcy and how it could help you, or if you have questions about bankruptcy and privacy, we can help. Contact the law office of Frank J. LaPerch, PC at 845.942.5500 to schedule a free consultation.