It should not be a surprise to anyone that one of the most important concerns of those considering filing for bankruptcy is privacy. It is true that bankruptcy is public information. Like most court cases, they are public record, you can view court records and sometimes newspapers publish notice of legal filings. Even though Bankruptcies are a public record they are actually harder to find for the public than most cases because you have to pay to access them.
Bankruptcies are filed with the bankruptcy court. If someone wanted to find a bankruptcy case, there are 3 ways:
1) Online through pacer.gov/ - you have to sign up for an account and enter payment information. You must pay $0.10 for every pageview (screen you look at) and $0.10 for every page of a document you download (it maxes out at $3.00 per document). Just to let you know, a bankruptcy petition is normally more than 30 pages;
2) At the courthouse - you can visit the bankruptcy courthouse and pay $0.10 per page for copies;
3) By telephone - you can call and get limited case information by phone.
Probably not. It is unlikely that the general public, like your friends and neighbors, are going to find out about your bankruptcy filing. The people you will talk to directly about your bankruptcy are your attorney and the people who work for the courts. Neither of these parties are going to post anything about your bankruptcy filing in social media or in the newspaper. It actually would take a lot of effort for the average person to find out about your bankruptcy filing if they wanted to see it. The truth is the only people that know how to navigate the court system are generally lawyers or people that work in the court system. It would take an average Arkansan quite a bit of work to find out about your case.
Maybe, maybe not. Below I will discuss who gets notice of a bankruptcy case. Normally, your employer only gets notice if you choose to make bankruptcy payments by employer wage withholding. If you want to do so, then you can. That being said, you do not have to pay by employer withholding. You can pay by phone, online, or mailing in a check. If you do not pay by wage withholding, then your employer will most likely not find out. Sometimes, filing bankruptcy may even prevent your employer from finding out you are behind on bills. Creditors may try to reach you at work, but once you file, the automatic stay goes in the place and creditors cannot try to contact you.
Some employers run a credit check on their employees. A bankruptcy will be on your credit report for 7 years (Chapter 13) or 10 years (Chapter 7) from the date you file bankruptcy. Everyone is different, but if you are thinking about bankruptcy, then you probably do not have a great credit score. If your future employer is going to run your credit, the score will probably be more important than the fact you have a bankruptcy on there. Some people actually have their credit go up after filing bankruptcy. I do not know if this is true, but I have heard people say so. After you file bankruptcy and get caught up on your debt, you can typically improve your score by using credit wisely. If you are behind on bills and unable to keep up, then your credit might be bad for years to come. With bankruptcy, you get a fresh start and a chance to rebuild your credit.
The bankruptcy petition lists creditors who are specifically notified of the bankruptcy filing. The contact information provided on the bankruptcy petition for each creditor is used to give notice directly to any of your creditors. The only other communication from the court goes directly to you or your bankruptcy attorney.
The bottom line? Privacy is a natural concern if you’re thinking of filing bankruptcy. But, your own peace of mind in getting your finances in order will be worth the low risk of others finding out. You are not alone – on average between 750,000 and 1,000,000 - people file bankruptcy each year.
If this is a little confusing feel free to call, 501.372.1212, or set up a free consultation by clicking here.