This is a concern often expressed by individuals considering bankruptcy. If I file for bankruptcy, what if my friends, neighbors, church members (you fill in the blank) find out? I would be so embarrassed.
First, filing bankruptcy is nothing to be embarrassed about. Most people do not end up in the bankruptcy system intentionally. The bankruptcy code was enacted to protect the honest but unfortunate debtor.
When faced with this quandary, it helps to consider the following very real scenarios to address the so-called embarrassment factor of filing for bankruptcy:
Scenario One: You are behind on your car payments. The car loan company has threatened repossession several times. Somehow, you have managed to stave them off. You come home one day to a very conspicuous tow truck with its flashing lights waiting to pick up your car. You are given time to empty out your belongings. The neighbors come out to witness the commotion. Flashing lights tend to draw a crowd. Your car is hauled away.
Scenario Two: You are behind on your credit card payments. The credit card company files a civil action against you to collect the money that has not been paid. In Pennsylvania, this means that a Sheriff (in a uniform and a marked car) will come to your home to make personal service of the complaint upon you. If you do not respond to the complaint and the credit card company gets a default judgment against you, their next step would be to attempt to collect on the judgment. In Pennsylvania, this would also involve the Sheriff’s Department. The Sheriff may come to your home (in a uniform and a marked car) and levy on your personal property and lists it for a public sale.
Scenario Three: You are behind on your mortgage payments. The mortgage company files a foreclosure action against you. In Pennsylvania, this means that a Sheriff will come to your home to serve the complaint on you. If the mortgage company is successful in its foreclosure action, often the property is listed for Sheriff’s sale. This can include the “posting” of your property of the impending sale, the publication of the impending sale of your home by the Sheriff in the general newspaper, and/or the publication of the impending Sheriff sale of your home in the local legal publication.
Now consider this . . . Scenario Four: You are behind on your car payments, mortgage payments, and/or credit card payments. You file a bankruptcy. The automatic stay goes in to effect and stops all collection efforts in their tracks. The bankruptcy gives you some breathing room to deal with your financial issues together with an experienced bankruptcy attorney. Yes, the bankruptcy filing is a public record. However, most people will not find it unless they are searching your name in the court records. And thankfully, most localities do not have a newspaper which publishes lists of personal bankruptcy filings.
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Last modified: December 15, 2009