Can My Bankruptcy Case be Sealed?

sealed envelope

Filing for bankruptcy is a big decision – one that has the potential to give you a fresh financial start. If you’ve found yourself to be significantly under water in regards to your collective debts, it may be your only way to swim out from under water and back up to the surface.

Although it is becoming less stigmatized, some people still feel that filing for bankruptcy is something you’d rather no one knew about. Because of this, you may find yourself wondering if a bankruptcy case can be “sealed” so that the matter can remain private.

Unfortunately, unless you possess a trade secret or find yourself in another extremely rare situation, information in bankruptcy cases will not be sealed. If, for example, you filed a restraining order and need to keep your address private, it is possible that that particular piece of information can be sealed in a bankruptcy. It is important to note, however, that only small bits of information can be kept private, and not the entire case.

Some people want to avoid the embarrassment of their friends, neighbors, and sometimes even family members finding out that they’ve filed for bankruptcy. While that is understandable, it simply isn’t possible to seal bankruptcy matters because all creditors have a right to know when one of their debtors has filed for bankruptcy. Additionally, any future (potential) banks and lenders need the information so they can make fair and reasonable lending decisions.

The fact that you’ve filed for bankruptcy must legally appear on your credit report for 7-10 years (depending on the type of bankruptcy). Thus, anyone who has access to your credit report will be able to see that you’ve had a bankruptcy filing. However, it is typically only lenders, landlords, (and rarely) potential employers who even want to look at your credit report.

If you are concerned about the potential for identity theft, rest assured that the bankruptcy process has been recently updated so that none of your identifying information can be stolen. In addition, children’s names are also kept private to avoid any harm or damage coming to them.

In many cases, people are most concerned about those closest to them “discovering” that they’ve filed for bankruptcy. Firstly: try not to be ashamed! Remember – you are taking control of your finances, and will very soon be living debt-free! If you take ownership of your situation, chances are good that your fear will abate. Your financial stability is much more important than anyone’s opinion about you filing for bankruptcy.

It should be noted, though, that as a general rule, people who file for bankruptcy report that most of their friends and family never even know they have filed. Unless you choose to disclose facts about your bankruptcy, it would be difficult for anyone to simply “discover” that you’ve filed. There is no general internet database of people who’ve filed for bankruptcy, for example. Without access to electronic court records (which only attorneys and other legal professional possess), it would be next to impossible for someone to learn anything about your bankruptcy case unless you share that information.

Image credit: Justin Henry

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