Does Everyone Know I’ve Gone Bankrupt?
Most people get a feeling of dread deep in their stomach when they think about their friends and family finding out they have filed for bankruptcy.
However, contrary to popular opinion, a notice of insolvency isn’t likely to be filed in the local paper, telling everyone you have ever met.
Conversely, the details of your bankruptcy are likely to be much less public than you may expect.
Keep reading to find out more.
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Can I keep my bankruptcy private?
Other than if you choose a person to take along to support you, and apart from the trustee you meet with, no one needs to know about your bankruptcy at the beginning stage.
The reason for this is that your initial meeting will be totally private.
In such a meeting, you can expect the trustee to discuss your financial situation and gather information about your current debts and income.
They will also likely discuss any assets you have, such as personal possessions, property, and vehicles.
Additionally, at the meeting, the trustee offers advice on your situation.
While also ascertaining whether bankruptcy is the correct option for you.
However, at this stage, no official action will have been taken.
Therefore your consideration of bankruptcy will remain confidential, even with regards to those whom you owe money.
Are my bankruptcy records public?
Once you have formally filed for bankruptcy, things are a little different.
However, this doesn’t mean that your financial situation becomes public knowledge.
Instead, at this stage, several people related to your finances will be notified of your insolvency on a need to know basis.
To determine whom to contact, your trustee will ask you to tell them about those people and organizations that you owe money.
All your creditors, including debt collection agencies on that list, will be notified of your insolvency.
The benefit of this being that they will no longer hound you for unpaid debts!
This stage of the proceeding is called the Initial Mailing.
It occurs pretty fast after you have formally filed for bankruptcy, usually within five days of submitting your paperwork.
Therefore, within those five days, all the people to whom you owe money will know you have declared bankruptcy.
Some additional bodies will be notified of your bankruptcy as well.
Your insolvency documents will then be sent electronically to the Government, who will then let the major credit bureaus know.
Finally, a notification may reach one other organization, if you file for bankruptcy.
It’s your employer, but do remember that this will not happen in every case.
The truth of the matter is, it’s relatively uncommon for notification of insolvency to reach your employer.
The reason for this is that it only needs to occur if there is wage garnishment that you need to stop because of the bankruptcy process.
Also, let’s not forget that when an individual goes bankrupt, and their assets total under $15,000, there will be no public notice in the newspaper.
Yes, it is a different matter for business and those with a higher total of assets.
However, unless you meet this criterion, it is not an issue that you need to concern yourself with at all.
Additionally, it can be helpful to note that some debt-relief options are never reported in the paper, no matter what assets are involved.
Consumer proposals being a god example of this.
Therefore, apart from the Government, credit bureaus, and those you owe money too, no one else is usually informed about your insolvency status.
What about Canada’s bankruptcy records?
However, it is wise to note that even those who haven’t received official notification of your insolvency can run a search via Canada’s bankruptcy records.
The thing is that doing so is a complicated process, and that means only those unusually motivated to do so are likely to bother.
For those looking to gain access to Canada’s bankruptcy records there are a multitude of steps.
These include, but are not limited to, registering for an account with Industry Canada.
Not to forget, the requirement of a paid fee for each search.
Additionally, even after paying, the searcher will only be provided with a summary of your debts and assets and will not be privy to in-depth information.
Although it is likely, they will be able to tell that you are bankrupt from the data they receive.
Will my employer find out about my bankruptcy?
Many people are particularly concerned about their employer finding out that they are bankrupt.
However, it is essential to remember that notifying them is not part of the usual insolvency processes.
Of course, just like any other private citizen, your employer can search with the Bankruptcy and Insolvency Records of the Office of the Superintendent of Bankruptcy, as detailed above.
However, it is unlikely they will do so unless they have a specific concern regarding your financial status.
One of the only reasons an employer may search the database is if you are in the initial stages of working with them, primarily if you handle money, bonds, or the like.
Bankruptcy is not a public shaming!
Therefore, in conclusion, the only people likely to find out about your bankruptcy situation are the Government, credit unions, and those to whom you owe money.
However, other people can register and pay to run a search to see if you are in insolvency.
Although the likelihood of this happening is relatively low.
Of course, this is excellent news for people struggling with debt.
Many of whom worry about the shame and embarrassment of having to declare themselves bankrupt.
However, rather than a public shaming, bankruptcy is designed to help those that have got into genuine difficulty and cannot meet their debts.
Are you considering bankruptcy?
If you are considering bankruptcy, do remember that there are both advantages and disadvantages to this course of action.
Fortunately, this is a topic that you can contact the experts at bankruptcycanada.com on 1-877-879-4770 to discuss objectively and in more detail.
However, worrying about your nearest and dearest finding out about your insolvency is not something that needs to keep you up at night.
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