Do you need to file for bankruptcy protection? Many Americans in your situation are ready to seek the legal relief they need, but they may worry about how it will appear to others. Since bankruptcy is a legal process, will everyone find out? Can you keep your personal finances private? And is there anyone who will need to know?
Here are a few answers to these questions so you can make the right call with confidence.
Is Bankruptcy Public Record?
Technically, bankruptcy through the court system is a matter of public record in the same way that most legal cases are. This means that if a person were to search specifically for information on your bankruptcy, they would be able to find records of your case. However, this isn’t something most people would accidentally stumble across. The person has to go through some hoops to find these records.
Who Might You Need to Tell?
Is there anyone that you should – or must – notify of your bankruptcy? Creditors will need to be notified, but the bankruptcy court will do this. So you don’t need to call up your credit card companies or even your uncle from whom you borrowed money. However, if your uncle will be surprised to learn that you were forced to include his loan in bankruptcy, it’s a good idea to have this conversation first.
In addition, you should notify anyone with whom you share assets or debts that will be affected by the bankruptcy process. This may include an ex-partner or ex-spouse if you retain some joint marital debt. Your declaration of bankruptcy may relieve you of the obligation to repay the debt, but it won’t free up the other debtor of theirs. And if you owe them support, you may be required to tell the recipient.
Who Can You Avoid Telling?
How much your friends, coworkers, and relatives know is largely up to you. Unless you share financial links – like joint debt or a business – you’re not generally obligated to tell them anything. And as mentioned earlier, it’s unlikely that they will casually find out.
You’re also not required to offer up information about current or past bankruptcies to your employer – now or in the future. Bankruptcy, although a public legal process, is still a private matter and your employer generally cannot discriminate against you for it. The primary exception may be some governmental positions involving security and joining the military.
However, if a new employer is going to do a credit check, they will likely find out about a bankruptcy within the last 7 to 10 years. Being upfront about this information helps you get ahead of that story.
How Long Will It Be Public?
Will you always have to wonder about if your bankruptcy will become common knowledge? It will remain a matter of legal record as long as court records are kept.
The method that old bankruptcy cases are often revealed, though, is through a person’s credit history. Bankruptcy will appear on your credit reports for a set number of years. For Chapter 7, this usually lasts 10 years. Chapter 13 filers may see it on their report for 7 years. Individual debts that were discharged should disappear from the reports at various times based on their respective ages.
Where Can You Learn More?
Do you have more questions about your particular circumstances? The best place to learn about your obligations and get recommendations about how to talk about your bankruptcy is by meeting with an experienced bankruptcy attorney in your state. The Madden Law Firm Attorneys at Law has aided Arkansas residents with their bankruptcy needs for more than 30 years. Call today to make an appointment.
