Bankruptcy Myths Debunked – Part 1

This is the first part in a series that debunks myths about bankruptcy. The first myth to be debunked is that everyone will know when you declare bankruptcy. Maybe you have fears of people watching you and whispering to one another when you go to work, your place of worship, or social events. Like some myths, this particular one has some aspects that are based on a degree of truth, but also “facts” that aren’t always true. Regardless of how you think you may be perceived by friends, co-workers or family, you need to make the decision to file for bankruptcy based on the facts of your particular situation and not from fears based on half truths.

Bankruptcy Proceedings are Matters of Public Record

Bankruptcy matters are made part of the public record and this fact can be a source of fear for some people. However, just because bankruptcy proceedings are part of the public record does not mean that everyone finds out about them. Unless one is a celebrity or unless one is prominent in one’s community, it is unlikely the media will report or even care about one’s bankruptcy filing. In Minnesota, bankruptcy proceedings are, with a few exceptions such as the Denny Hecker bankruptcy case, not published in newspapers. This is different from many foreclosure proceedings which must be published in newspapers to comply with the foreclosure notice requirements under Minnesota law.

Many People File for Bankruptcy

Because of the high cost of medical treatments, bad economy, job loss, and a host of other reasons, many more people than you probably realize file for bankruptcy relief. Chances are, you already know some people who have found themselves in desperate financial circumstances and have needed to declare bankruptcy. Perhaps people whom you know have actually told you about their bankruptcy proceedings. Perhaps people whom you know that actually have filed for bankruptcy relief have not told you about it.  Regardless, the reality is that while bankruptcy proceedings are matters of public record in most cases people never hear about whether any particular person actually has filed.  With the large number of people filing for bankruptcy, few publications have the space or resources to list the names of people who have filed.

Certain parties such as creditors one owes money to, bankruptcy court officials, and other necessary parties must be notified of a bankruptcy proceeding because the bankruptcy code requires it and because many of those same parties actually administer and participate in the bankruptcy proceeding. Generally speaking, however, unless one tells someone else about a bankruptcy or unless one must list someone as a creditor in a bankruptcy, no one else will find out about it. If someone really wanted to do so, one could access the bankruptcy court docket in any particular state and find out about any bankruptcy proceeding. However, accessing federal court records is not an easy process and can be expensive.

Know the Truth

Any competent and responsible Minnesota bankruptcy attorney should be well versed regarding the repercussions of bankruptcy. At Behm Law Group, we have assisted numerous clients through the bankruptcy process. For all of them, declaring bankruptcy served as a welcome financial and emotional relief. Filing bankruptcy has provided them with a fresh start. If you have questions about bankruptcy, don’t hesitate to contact us at Behm Law Group Ltd.