Is there such thing as bankruptcy confidentiality and privacy?
It should not be a surprise to anyone that one of the most important concerns of those considering filing for bankruptcy is privacy and confidentiality. There is a lot of information out there on the internet that states that bankruptcy is public information. People are worried that a personal bankruptcy filing is going to label them in the eyes of the public. Sometimes, this becomes a deciding factor in why someone uses their right to file bankruptcy or not. The shameful stigma of a bankruptcy is a strong force in the decision to file one or not.
Technically, it is true that a bankruptcy filing is considered a public filing. The reason for a filing to be accessible to the public is not for the purpose of public shaming. It is for the purpose of past and future creditors to be able to reference your financial background and for credit bureaus to be able to use the information for your credit score. Current creditors may find out about your bankruptcy filing to guide their course of action to either close your account or contact you or your attorney to see how they can work with you through the bankruptcy filing. Future creditors may see the bankruptcy filing on your credit report to help them decide whether they will be able to lend to you and how much they will be able to lend to you.
Are your neighbors going to find out about your bankruptcy filing?
It is unlikely that the general public, like your friends and neighbors, are going to find out about your bankruptcy filing. The people you will talk to directly about your bankruptcy are your attorney and the people who work for the courts. Neither of these parties are going to post anything about your bankruptcy filing in social media or in the newspaper. It is actually would take a lot of effort for the average person to find out about your bankruptcy filing if they wanted to see it.
The Central District of California includes Los Angeles, Riverside, San Bernardino, and Orange County. Someone would have to request the information from one of the courts in the Central District to get bankruptcy information, or they can use an electronic system from that the Central District court has available called PACER. To use PACER, they would have to create an account online, then do a search in bankruptcy records, and very likely have to pay a fee to get the details of the documents that are filed in the bankruptcy court. It is not as easy as looking online for a list of bankruptcies that were filed. In most cases, a bankruptcy filing does not interfere with private life and personal relationships unless finances were are part of a relationship in some way.
You are not the only one filing for bankruptcy!
The reason privacy and confidentiality are always a concern is that many of us who consider bankruptcy feel like they are alone in this situation. They feel isolated and feel like no one else is facing this type of problem. In actuality, many people are able to keep bankruptcy filings private which means you are not alone. In 2016, according to the Central District of California, the Santa Ana court alone had 4,215 Chapter 7 bankruptcy filings and 1,180 Chapter 13 bankruptcy filings. In Riverside court, there were 9,215 Chapter 7 bankruptcies and 2,556 Chapter 13 filings. Your situation is definitely not isolated and you have plenty of company. Thousands of people file for bankruptcy in the local area each year. This means that bankruptcy is definitely being used as a solution and it is not easily publicized to be common knowledge among your friends and acquaintances.
If you would like more information on how to start filing for bankruptcy or to find out if bankruptcy is a solution for you, contact us to speak directly with our attorney in person or by phone at 855 257-7671.