Will everybody know you filed for bankruptcy?

On Behalf of | Jul 28, 2023 | Bankruptcy

There’s really no shame in being in debt. Life is hard, and it only takes one or two missed paychecks or a single medical crisis for the debts to pile up.

Just the same, many people dislike the idea that “everybody will find out” about their financial troubles, and the fact that bankruptcy is a matter of public record may intimidate you.

Don’t let it. Even though people can learn about your bankruptcy if they try hard enough, the vast majority of people who will find out are already somehow involved in the process. Here’s what you need to know:

That “public record” isn’t exactly broadcast all around

The only people who are notified of your bankruptcy petition are your creditors. The rest of the world is largely going to be oblivious to the information because nobody is going to notify your friends, neighbors, co-workers or relatives unless you do.

While people can find out, they would have to look pretty hard and do far more than a simple Google search. Bankruptcy records are maintained in court databases that aren’t that easy to locate or use.

Your boss only has to know under certain circumstances

It’s illegal for your employer to discriminate against you even if they do find out that you filed for bankruptcy, but the odds are slim that your employer will know.

You may have a contractual obligation to notify your employer about the bankruptcy if you work in certain financial sectors, so review your company handbook and your contract to be sure. If not, the only reason your employer would be notified is when a wage garnishment has to be stopped or you file Chapter 13 and have a wage deduction as part of your repayment plan.

When you’re struggling under a mountain of debt, don’t let your concerns about what people might find out stop you from seeking the financial relief that you need.