WHO WILL KNOW ABOUT MY BANKRUPTCY?

One of the most common questions asked about the Chapter 7 and Chapter 13 bankruptcy process is, "Who will know about my bankruptcy case?"  Filing bankruptcy is usually very confidential, but the Bankruptcy Code and Federal Rules of Bankruptcy Procedure dictate that notice of your bankruptcy case must be sent to certain individuals and businesses.

Bankruptcy is a legal process and is a matter of public record.  Few newspapers will publish bankruptcy filings in the "public notices" section.  While this was a common practice for newspapers in the past, the sheer number of bankruptcy filings makes reporting personal bankruptcies impractical.  This year more than a million and a half people will file bankruptcy, and more than 5.7 million people have filed since September 30, 2005.  Unless you are a public figure or your bankruptcy case is somehow newsworthy, it is incredibly unlikely that news of you bankruptcy will appear in any section of any newspaper.

You are required to submit a list of the names and addresses of every individual or business to who you owe money at the time your case is filed.  Everyone on that list is sent a notice of your bankruptcy case.  The notice also prohibits the creditor from taking any further collection activity as a result of the bankruptcy Automatic Stay.  The bankruptcy court will send notices only to the names on your list of creditors, to your attorney, and a notice to your address.  Friends and family members are not sent notices unless you identify them on your list.

Your employer may receive notice regarding your bankruptcy in a few limited circumstances.  Obviously, if you owe your employer money, your employer will be notified.  A second circumstance is when you file a Chapter 13 repayment bankruptcy and you wish to have your monthly plan payment automatically deducted from your pay. In this instance a court order is sent to your employer, instructing your employer to withhold the plan payment from your wages.  Finally, there may be specific, other reason to notify your employer. For instance, if you are currently experiencing a garnishment of your pay, you will want to have your attorney send notice of your bankruptcy filing to your employer to stop the garnishment. This termination of any garnishment existing at the time your Chapter 7 or Chapter 13 bankruptcy is filed also happens as a result of the bankruptcy Automatic Stay.

Since your bankruptcy case is a matter of public record, an individual may contact the bankruptcy court to obtain information about your case.  Most bankruptcy courts have an automated telephone system that will provide basic case information to the public.  Some individuals are able to access the Public Access to Court Electronic Records (PACER), an electronic public access service that allows users to obtain bankruptcy case information via the Internet.  PACER registration is free, but the system charges an access fee per page.

The typical bankruptcy case is quick and confidential.  However, every case is different.  If you have specific questions about the effects of filing bankruptcy, consult with an experienced bankruptcy attorney.  Your attorney can explain the benefits of the federal bankruptcy laws and the process for discharging your debts.