Is a personal bankruptcy part of the public record?

On Behalf of | Feb 24, 2024 | Bankruptcy |

There are many reasons why people might need to file for bankruptcy. Maybe someone with a very tight budget suddenly lost their job and ends up overwhelmed by unmet financial obligations. Perhaps they fell behind on one account, and a creditor served them with paperwork for a lawsuit.

Numerous personal issues might lead to someone contemplating a bankruptcy filing. Despite the many potential benefits of bankruptcy, many people would prefer not to file. They may worry about social stigma and how their bankruptcy might affect their reputation in the future.

Is bankruptcy part of the public record, and how much of an impact could it have on someone’s reputation?

Bankruptcy is a public matter

Like many legal matters, bankruptcy filings are typically part of the public record. The courts generally publish notice about filings and discharges. There is also an online database that provides access to information about prior bankruptcy cases.

Additionally, the record of someone’s discharge remains on their credit report for at least seven years but possibly 10 years after they complete their bankruptcy proceedings. Anyone who checks the online database or has someone’s identifying information could potentially learn about their prior bankruptcy until it comes off of their credit report.

Will bankruptcy damage someone’s reputation?

There is a degree of social stigma associated with bankruptcy. People may assume that someone made financially irresponsible decisions, such as overusing credit cards. Landlords and employers are among those who might have a lesser opinion of an individual after learning about their bankruptcy. However, the average person is both unlikely to learn about someone’s bankruptcy and to give it much weight in the context of an interpersonal relationship. For the most part, a bankruptcy followed by responsible financial conduct should have home a short-term, minimal impact on someone’s reputation.

The more time that has passed since someone’s discharge, the less weight others may ascribe to a previous bankruptcy filing. Instead of struggling financially for years out of concern for one’s reputation, it is often better to move forward with a bankruptcy when someone faces insurmountable financial challenges. They can then regain control over their finances and start focusing on rebuilding.

Overcoming fear of social stigma may help people make the best choices during times of financial hardship.