When Filing Bankruptcy, Who is Notified?
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The fear of everyone finding out you filed bankruptcy is one of the biggest reasons people wait or even decide not to file. While the stigma of bankruptcy is lessening, having to file and admit you can’t pay your bills can be difficult, especially if you made financial mistakes that could have been avoided.
Fortunately not many people need to know you filed bankruptcy, except your creditors. When you complete your bankruptcy petition, you must include an address for each of your creditors. The creditors are then notified by mail to give them the chance to file an objection. If you had someone co-sign on a loan for you or a credit line, they will also be notified, so this can be a sticky situation, especially if it’s a close family member or friend.
Some cities still post bankruptcies in the local newspaper to notify the public, but very few do and even fewer people read them. If you have a wage garnishment, your employer will be notified in order to have them stop the wage garnishment. While this can be embarassing, you can’t lose your job just because you filed bankruptcy.
If you owe back taxes the local IRS office will be notified, as well as any jurisdictions where there are currently legal actions pending such as creditors suing you, or foreclosure proceedings.
For the most part, the people that are notified that you have filed bankruptcy are those that you want to be notified so the automatic stay goes into effect and they stop trying to collect your debt.
