Who Finds Out if You File Bankruptcy? - Total Bankruptcy
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Who Finds Out if You File Bankruptcy?

Bankruptcy is the favored form of debt relief for more than a million people each year. Despite this impressive track record, some people are still concerned about a perceived stigma surrounding bankruptcy.

This fear of stigma leads them to ask who finds out if they file bankruptcy. If you file bankruptcy, your creditors and the bankruptcy court will know, but your family, friends, and employers often do not have to find out.

In addition, the stigma surrounding bankruptcy has been shattered, especially as millions of people obtain much needed debt relief from the process.

The People Who Find Out if You File Bankruptcy

As mentioned above, if you’re filing bankruptcy, you may be curious who finds out if you file bankruptcy. Listed below are some of the different entities that will know about your bankruptcy:

  • Creditors. Since your bankruptcy is intended to eliminate your debts, it is only natural that your creditors will be informed of your filing. Of course, if you are able to discharge your debts, creditors are often unable to seek any further actions, so their knowledge may not cause you any financial distress.
  • Bankruptcy trustee. When you file bankruptcy, you will likely be assigned a trustee, who will help guide you through your case. This trustee is usually expected not to disclose any of your financial information to outside parties.

Who Does Not Find Out if You File Bankruptcy?

Listed above are the people who will definitely know about your bankruptcy. Technically, your bankruptcy becomes a public record, so it is conceivable that other people could discover your filing.

This process, however, usually involves a lot of paperwork, and most people do not take the trouble to rifle through bankruptcy records. Nevertheless, people who may find out if you file bankruptcy include:

  • Family or friends. If you have co-signed a loan with a family member or a friend, and then file bankruptcy to discharge your portion of the debt, that person will usually be notified. Otherwise, the bankruptcy court does not notify family or friends about your bankruptcy unless there is an obvious need to do so.
  • Potential employers. If you are job hunting, potential employers may be able to find out about your bankruptcy, but they are prohibited by law from discriminating against you due to your former bankruptcy.

Thus, some employers or family members may find out if you file bankruptcy, but only under limited circumstances.

If you're considering filing bankruptcy, it's important to know all the facts and have clear expectations.

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