How Long Are Bankruptcy Petitions Public Record For?

The filing of a bankruptcy is made part of the public record but the reality is that most people won’t know that you filed for bankruptcy. When you file a Chapter 7 or a Chapter 13 bankruptcy, the information is processed through a publicly accessed information system called PACER.

PACER stands for Public Access to Court Electronic Records. PACER keeps information about bankruptcy filings throughout the entire country.

Most everyday people, aside from bankruptcy lawyers and trustees, don’t generally access the PACER system.

For starters, if you wish to access the system, you have to register to use they it and access to it isn’t free. Any person that accesses the system must pay a fee for each page of information they obtain. Lenders may access the system and anyone who has a specific need may access it.

Employer knowledge of your bankruptcy

Generally, employers can obtain knowledge that you filed for a Chapter 13 bankruptcy if you file a plan and you authorize access, or if the bankruptcy court requires that your employer pay the bankruptcy trustee the amount you agree to in the Chapter 13 plan.

The amount you may agree to pay should be enough to pay the arrears on any secured debts, and any priority debts plus a percentage of any unsecured debts. The monthly payment amount also includes the amount that is for the trustee’s costs.

Secured debts include any assets where you agreed that if you failed to pay the loan, the creditor could take possession of the assets. The most common examples of secured assets include your home and your car or other type of vehicle.

Employers can also find out that you filed bankruptcy if a creditor had a wage garnishment order, and your attorney or the court then notified your employer that the wage garnishment should end because your debts in bankruptcy have been discharged.

Note that generally, employers can’t fire you nor demote you if they learn that you’ve filed a bankruptcy. See Will Declaring Bankruptcy Stop Me from Getting A Job In Hartford?

However, if you have a job where your ability to manage funds is a key part of your job, then an employer may deny your job application.

Access to your credit reports and your bankruptcy record

There are several credit agencies such as Experian or Equifax that keep records of any bankruptcies you filed, and judgments against you; possibly any liens, and, of course, your record of timely (or un-timely) payments on any of your credit cards.

There are also many financial obligations don’t always come to the credit agency’s attention. Some items that are on your record should be removed.

In addition, you usually have the right to add a statement that contests or explains any financial negatives on your credit report.

If a bankruptcy is on your credit report, it should be removed after 10 years. Any judgments that are 7 years old or older should also be removed.

If they haven’t been removed, you (or your lawyer) should demand that they be removed and this can be done by contacting the credit agency or sending them a written letter requesting the record be removed.

Credit reports are used for various purposes; loan companies will review them and if you apply for a job, your employer may ask to review your credit report.

If you apply for an apartment, the apartment complex will review the credit report too.

If you buy a home and need a mortgage, your credit report will be reviewed.

Car companies may review your credit report depending on how much you need to finance, how much money you are able to put down, and the value of the vehicle.

There are some cases where you may be directly asked about whether you have filed for bankruptcy.

As a practical matter, most employers and apartment complexes will just review your credit history. If you declared bankruptcy more than 10 years ago, you should be OK.

Even if the employer or apartment landlord sees the bankruptcy, you can easily explain what happened and the circumstances behind it.

In most cases, as long as the bankruptcy was discharged and your bills were either discharged in a Chapter 7 or paid through a Chapter 13, you should be able to apply for the job and be approved for the apartment too.

Creditors knowledge of your bankruptcy

Whether you file for a Chapter 7 or a Chapter 13 bankruptcy, you will need to provide the names and addresses of the creditors you owe money to.

The bankruptcy court will then notify these creditors that you have filed a bankruptcy petition. This is how they become knowledgable of your bankruptcy.

These creditors can then tell other people.

As a practical matter, most creditors will rely on the trustee in bankruptcy to handle their interest.

If you filed a Chapter 7, then the unsecured creditors will wait for the discharge notice to decide how they should handle their taxes, and accounting with regard to the discharge.

If they are to receive a payment through a Chapter 13 bankruptcy, they will await the monthly payments that they will receive from the US trustee assigned to your case.

Even though bankruptcy does become public knowledge to creditors and possibly to others, you should know that there is no shame or dishonor in filing for a bankruptcy – it’s actually your right to do so. Many people get into financial difficulties and bankruptcy is there to provide you a chance to start over again.

That’s why the US Constitution authorized bankruptcies. Many people lose a job or need medical care that insurance won’t cover (or they don’t have insurance).

A divorce can also make paying the bills very difficult and many people also get into credit debt and find they can’t handle the interest payments that become due.

The bottom line is that bankruptcy gives consumers like you a second chance. By discharging your unsecured debts in a Chapter 7 or entering into a Chapter 13 bankruptcy plan; you can stop the aggressive collection actions and you can get the breathing room you need to properly handle your debts.

You can get a fresh start and even though your bankruptcy is pretty much going to be made public record, never let that deter you from filing because for the most part, the important people in your life will never learn of it.