“Exactly How Embarrassing is Bankruptcy?”

You are an adult.  You are approaching your bankruptcy as an adult – making the hard decisions and living with the consequences.  But you can admit it.  Despite your ability to try and remove the emotion from this decision to file bankruptcy, there is a big worry in the back of your mind that the entire world is going to know you filed for bankruptcy. And if everyone knew, that would be really embarrassing.

Many believe that once you file bankruptcy that your name will be in the paper or that there will be some website of shame where you name will appear.  But the reality is, unless you are Warren Sapp, Toni Braxton, or some other famous person filing for bankruptcy, the only people who will really know is whoever you decide to tell.

The beginning stages of bankruptcy are between you and your bankruptcy lawyer.  When someone comes into my office for a bankruptcy consultation the attorney/client privilege applies.  The information you provide me is kept absolutely confidential.

Once your case is filed with the bankruptcy court the notice of your case will then be sent to your creditors.  For obvious reasons your creditors will know of your bankruptcy. If you have personal friends or family members that you owe money to you are required to list those debts and they will be provided notice of your bankruptcy filing.  While technically the documents you file with the court are public record, the only way someone would know you filed for bankruptcy is if  for some reason they thought that you had filed and went down to the bankruptcy court and asked to see a copy of your filing.

The modern bankruptcy court has online access to your bankruptcy filing, however this website is password protected and generally only accessible by bankruptcy lawyers or creditor lawyers.  There is one time when you will have to be out in public and discuss your bankruptcy.  This occurs at the Meeting of Creditors.  This is a short meeting between you and your bankruptcy trustee.  Creditors are also welcome to attend but rarely ever do.  In Arizona the bankruptcy trustee is assigned to review your documents and then going over a few brief questions with you.

These meetings are typically held in a conference room at the Arizona bankruptcy court and usually last about 5 minutes or less.  While it is true that in this meeting others will see and know that you filed for bankruptcy, you can take some comfort in (1) they are strangers that you will likely never see again, and (2) they are in the same boat.  If they are at the meeting they are likely in bankruptcy themselves.

So, will everyone know that you filed for bankruptcy?  No, not unless you tell them.  If you are facing serious financial problems this should not be a reason for you to dismiss the idea of using bankruptcy as a solution to your debt problems.