If you are thinking about filing a Chapter 7 or Chapter 13, you may be wondering who will find out about your filing. While a bankruptcy case is a matter of public record, the reality is that most people will never know you filed a bankruptcy unless you tell them. Your filing is not published in the local newspaper and the online court filing system requires the user to have an account and password set-up, which typically only attorneys have in place.
The bankruptcy court provides notice of your filing to your creditors or anyone who you owe money to, including family or friends. However, it is important that you do not attempt to pay any debts owed to friends and family to avoid them receiving notice of your filing. The trustee could consider this a preferential payment because all creditors are supposed to be treated the same and paying your family member ahead of your filing is showing a preference. The trustee can pursue the repayment of preferential transfers.
Many people are worried about their employer finding out that they filed bankruptcy. If you file a Chapter 7 case and you do not owe your employer any money, it is unlikely your boss will find out about your filing. The same is true for a Chapter 13, unless you fund your plan payments through payroll deductions. In this case, the court will put your employer on notice that the appropriate deductions must be made from your paycheck. Additionally, a potential employer could discover your bankruptcy filing if a credit check is run on you.
While it is normal to want to keep your bankruptcy filing private, it is important to understand that many people across the nation have sought bankruptcy protection. There is no longer the same stigma that there used to be. In fact, you may discover that others are more understanding that you expected.
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