Many people who could benefit from filing for bankruptcy hesitate to do so because they fear everyone will find out about it. Even though thousands of people file for bankruptcy every day, some people still feel embarrassed about it.
Will everyone find out if you file for bankruptcy?
Who will know about your bankruptcy?
When you file for bankruptcy, the court and your creditors will know. This is because the court has to notify your creditors. Your friends, family and employer will not usually receive a notification. When you file for bankruptcy, the court will assign a bankruptcy trustee. However, this person should be discreet about your case and not provide the details to anyone who does not have a reason to know.
When might the court notify your friends, family or employer?
If you have one or more loans that have a co-signer, the court will usually notify the co-signer when you file for bankruptcy. This is because the co-signer may have to make payments on that debt. Generally, the only time an employer or potential employer may find out about bankruptcy is if they run a credit check on you as part of pre-employment screening or less often, for a promotion or new position. It is not legal for employers to discriminate against you for having a bankruptcy on your record.
Bankruptcy is a very common tool for dealing with unmanageable debt. Do not let the fear of embarrassment stop you from taking advantage of this tool.
