Unfortunately, bankruptcy carries a stigma, even though many New Yorkers end up needing to file for a huge range of reasons. If you are considering bankruptcy, you may worry that co-workers, friends, romantic partners, or even your boss may discover that fact and treat you differently. While it isn’t possible to keep bankruptcy relief filing completely secret from everyone, our New York asset protection attorney notes some situations where you can keep the details private.
Who Will Know About My Bankruptcy?
The single most important fact to keep in mind is that all bankruptcy proceedings are a matter of public record. Potentially anyone can legally request copies of creditor meeting details and other information pertaining to your bankruptcy from the trustee overseeing your case.
There isn’t a mechanism for sealing those records or keeping your information private from the public at large. Only specifically protected information, such as your Social Security number, is kept out of these records. Theoretically, any person in the country could learn that you filed, although the likelihood of someone discovering that information is low unless you tell them or they have some reason to be notified.
A major concern of many debtors is that news of their bankruptcy may eventually be printed in the newspaper since it is public information. Every single bankruptcy filing doesn’t automatically hit the local paper, but some that involve notable members of the community or large employers may see print. It is possible that friends or family will see a newspaper announcement, but bankruptcy is otherwise difficult for the average person to learn about.
Acquiring bankruptcy records requires paying money to go through an online service or spending time at the courthouse tracking down documents in person. That’s typically more effort than even the most intrusive co-worker or snooping friend is willing to go through. That is doubly true if they have no reason to suspect you filed.
Your creditors are all specifically notified of bankruptcy, however. It isn’t legally possible to keep a bankruptcy secret from banks or other lending institutions as they are the ones who will specifically be involved in the proceedings. That will, of course, drastically impact your ability to acquire credit in the near future.
Will My Employer Find Out If I File for Bankruptcy in NY?
Avoiding embarrassment or harassment at work over financial troubles is another top concern from clients. Unlike with creditors, the trustee in your case doesn’t automatically inform your place of employment that you filed. Whether your employer will eventually discover your bankruptcy status depends on what specific type of bankruptcy you end up utilizing.
This is one extremely important reason to talk to a lawyer early—so you know what to expect and how to prepare. When attempting to file for bankruptcy, you will have to take a means test. That test determines if you are capable of repaying a reduced amount of debt over a period of five years rather than having your debt completely wiped out and certain assets seized to pay off your creditors.
If the means test shows that you need to file for Chapter 7 bankruptcy, it may be possible to keep your financial issues hidden from your current employer and co-workers. That’s much less likely under Chapter 13 bankruptcy, however, since your monthly wages will likely be garnished to pay your creditors. Of course, future employers may find out either way if they run a credit check during the hiring process.
Keep in mind that you still have legal rights even after declaring bankruptcy. It is illegal for your employer to discriminate or retaliate against you in any way after getting legal bankruptcy relief. If that occurs, you need to speak with an attorney as soon as possible.
Help! I Have More Bankruptcy Privacy Concerns!
Have more questions about specific privacy issues? Discuss your situation with an experienced New York bankruptcy lawyer before beginning the bankruptcy process. Theodore Alatsas can help you understand what mistakes to avoid and the next steps to take towards a new financial beginning. Get in touch online here or call the Alatsas Law Firm office to schedule an appointment at 718-233-2903.