In recent years, well over half a million Americans have filed for bankruptcy. Many people who have suffered through complicated bankruptcy proceedings do not realize that their records are public documents. There are no state or federal laws that protect privacy in bankruptcy cases. There are several reasons why a person or entity would want to conduct a bankruptcy record search, including:
- A potential employer wishes to conduct a comprehensive background check.
- A professional licensing committee will often conduct an investigation when considering a person’s application for a license to practice in their profession (such as a lawyer or a doctor).
- A credit card or loan company almost always runs a credit check to determine eligibility for approving a loan or credit limit.
- A person considering investing in a particular company will usually want to learn that company’s financial history.
Where Can Bankruptcy Records Be Found?
Bankruptcy records will be found when using Public Access to Court Electronic Records (PACER), a federal judiciary service, the National archives, as well as various websites that offer search services for a nominal fee. Through the U.S. National Archives website, you can order bankruptcy records online by state, but you will need some pertinent information, including:
- If a business, the tax ID number
- The case # assigned by the court for the bankruptcy case
- The person’s name and, in some cases, social security number
Also, know the jurisdiction in which the petition was filed. There are currently 14 regional records service facilities of the National Archives, where you can obtain hard copy bankruptcy records of all cases handled in that jurisdiction.
Bankruptcy records are reported for 10 years on a person’s credit file. Bankruptcy information, will often appear in the "public records section" of a credit report. Information included for public access include tax liens, mechanics liens and child support delinquencies judgments. The 10 year recording period cannot be waived.
There are several considerations when looking into a bankruptcy record. Some mitigating factors that soften the blow of a bankruptcy filed include the reason why a person filed for bankruptcy (credit card vs. student loans) and the period of time that has passed since the filing (1 year v. 30 years).
What Types of Bankruptcy Records Will Be Found in a Search?
Most cases are filed under the three main chapters of the Bankruptcy Code, which are:
- Chapter 7 – Liquidation bankruptcy for individuals and businesses
- Chapter 13 – Repayment plan bankruptcy for individuals with a steady stream of income and for businesses seeking to reorganize
Studies show that 65% of individual consumer bankruptcy filings are Chapter 7 cases. Fortunately, for those who recently filed bankruptcy and wish to keep their records private, newly settled Chapter 7 and Chapter 13 actions are not available through most websites. However, if a creditor, employer or professional licensing administration wants to access the records they can usual be found in online newspapers in the business section.
However, there are also 4 other types of bankruptcy chapters that are available immediately including:
- Chapter 11 – Used by commercial enterprises to pay their debts.
- Chapter 9 – Applies to municipalities, which includes cities and towns.
- Chapter 12 – Used by farmers and fisherman repay their debts over a number of years.
- Chapter 15 – Used if the debtor is out of the country, such as those in the military who live abroad.
Do I Need an Attorney?
In some cases, bankruptcy records are easily obtained. However, a bankruptcy lawyer can explain the implications and meaning of the record itself. There are many confusing terms that may be overlooked, without the assistance of an attorney. Also, in the preparation of a lawsuit, the record can be used as a valuable piece of evidence.
If you are considering bankruptcy, you should consult a lawyer who can explain the pros and cons that may affect you in the future.