Attorney-Client Relationship

“But What Will the Neighbors Think?”: Why They (Most Likely) Will Never Know (Unless You Tell ‘Em)

My good friend and colleague from the other side of the Palmetto State (i.e., Greenville/Spartanburg), Dana Wilkinson, has penned a thoughtful piece on one of bankruptcy debtors’ biggest fears: who will find out about my bankruptcy?

The likely answer: Not many. Your creditors have to find out, of course. And some family members or your employer may also be entitled to notice, if they’ve lent you money, for instance, or if your Chapter 13 payments are being deducted directly from your paycheck.

But otherwise, the days of your bankruptcy being published in the paper to the derision of all are, thank God, over. It’s true that these are public filings and as such anyone can walk into the bankruptcy court, ask to peruse the files and find out (or these days, much more likely they have access to PACER, the court’s electronic filing system). But the honest truth is not many people care to put forth that kind of effort - they’re usually too concerned about their own financial issues, to be honest.

Dana tells some wonderful stories about this issue, and my favorite is her recount of two clients who, unbeknownst to either, had both retained Dana to represent them - a woman and her stepdaughter. They found out each other had filed the day of the creditors’ meeting, when they passed each other in the hallway. Dana also hints at the bigger issue at work - the stigma, and the fear, and the corresponding shame many debtors feel in regards to their plights. As Dana notes, though, when people open up (in careful, considered ways, and to appropriate people), they usually find a wealth of support and company that they had no idea existed.

Something to think about when you consider your next step out of financial distress.

Technorati Tags: bankruptcy stigma, personal finance

Powered by ScribeFire.

© 2007 SC Bankruptcy & Consumer Law Blog.