Is There Such A Thing As a “Secret” Bankruptcy?

As a consumer bankruptcy attorney, I often find myself reassuring folks who come into my office for consultations that the filing of a bankruptcy won’t be published in the newspaper, that their employer won’t have to know, that their kids won’t have to know, or that the neighbors won’t be talking about them at the next yard sale.  Cathy Moran, my colleague from California, finds the same questions there.  However, recently, I had a consultation with a prospective client who planned on not telling the non-filing spouse about the bankruptcy at all–to keep it a total secret.   As Rachel Foley, my Kansas City colleague, points out, there are many bankruptcy secrets (really….little known facts, not truly secrets…)  However, keeping a bankruptcy secret from your spouse should not be one of those secrets.   Ever.

I have often counseled my consultations that the bankruptcy is often a symptom of a far more serious issue happening in their lives:  illness, loss of employment, death of a financial support to the household, or the loss through divorce of financial support of the household.   Failing to talk about the real  issue and hiding a bankruptcy doesn’t help the bigger issue–whatever caused the financial difficulties is better worked on between all household members.   The filing of a bankruptcy is a very serious financial matter, especially if the spouse is on a joint debt.   Mail starts arriving at the house from the United States Bankruptcy Court.   The spouse may wonder why the filing person wants six months of the other’s paystubs and is wandering around the house writing down the contents of the house.  

An attorney can point a debtor towards a path of financial stability but the debtor is the one who must walk on that path….and it is usually better to have the support of your loved ones.   I urge my consultations to talk with their family and make the decision on filing bankruptcy after long discussions with the household.