A question that comes up a lot is, “Who else is going to know I filed bankruptcy” or “is my bankruptcy public record”? The technical answer to these questions is yes, it is public record. However, for the average person, it’s not, unless you have the knowledge of where to look for it. When a person files bankruptcy, the filing is a part of that person’s credit report almost instantaneously. Anyone who runs credit on a bankruptcy filer is going to see it and know that a bankruptcy was filed. Once a discharge is issued, the bankruptcy laws state that any debt that was part of the discharge can only be reported as “discharged in bankruptcy.” But, this is only for those who see the credit report like credit card companies, car and home lenders, and anyone else you give permission to obtain a copy of a credit report. What about everyone else? Does my boss know? Will my family members find out? Probably not, unless you tell them.
You may already know that keeping your credit and personal financial information private is a good thing. You don’t want your neighbors, strangers and maybe even family members knowing your personal business. Filing bankruptcy is an extremely personal decision. You are telling a court that you can’t or don’t have enough to cover all the credit you have taken and in need of help. Just the thought of asking for help is overwhelming to some. On top of that, the idea that everyone will know about the bankruptcy makes things worse. The good news is that most people do not have the capability of finding out about your bankruptcy filing. Bankruptcy is a public record, but to see that record takes some skill and knowing of where to look. Bankruptcy is not posted in the newspaper, or on any public website, or on a list that is put out in the open for people to see. Typically, the only people who see your bankruptcy are ones that are looking into your background for either a credit check or employment background check. There may be other reasons, but the important thing to know is that you won’t be carrying around your bankruptcy filing like a Scarlett letter. Unless you tell someone you filed bankruptcy, there’s a high, high chance they would never even know it.
Another question I get is, “what do I say when I have to disclose that I filed bankruptcy?” There is no shame in filing bankruptcy. Many, many people have filed, and you certainly won’t be the last. Even though it was a very personal decision to file bankruptcy, if you must disclose it, simply tell what happened. You don’t have to go into a lot of detail but give the basic reason. There are many reasons why you have to file bankruptcy. If the reason is legitimate, people will understand. I find people file bankruptcy because of divorce, business failure, job loss, medical debt, tax debt, and this is just the tip of the iceberg. Don’t be stressed about things you cannot control. Take control of what you can, which is getting a fresh start from your debt, if that’s what’s best for you. Everyone who matters will understand why you made the decision to file bankruptcy.