Will Anyone Know About Your Bankruptcy?

A bankruptcy cannot be hidden from the public purview. However, just because you must publish your bankruptcy in the public records doesn't mean you have to confess your financial woes to everyone you meet. Indeed, it's perfectly legal to hide your bankruptcy from an employer. Unless that employer functions as a creditor and comes across your records during the course of business, he or she may likely never learn of your previous financial intransigence.

Of course, strategic bankruptcy experts recommend that clients disclose past filings to new creditors, business associates and affiliates, and even potential investment partners. While you don't have to wear your bankruptcy on your sleeve, if you disclose your bankruptcy early on in your business relationship, it won't cause trouble down the line. If, on the other hand, a business partner gets involved with you only to discover several months later that you have concealed your bankruptcy, he or she may be more suspicious of the partnership and may opt to exit it.

That said, professionals are aware that bankruptcy is a difficult decision and a private one -- under normal business circumstances, most practitioners in your industry will likely accept your bankruptcy status and move past it -- particularly if you demonstrate efficiency at your job.

It's possible to apply for credit cards, loans, leases, and liens without revealing your bankruptcy status. However, failure to disclose with respect to these arrangements may be illegal, and you could end up having to pay back fines and penalties if your creditor discovers the truth. Moreover, arrangements between you and the “blindsided” lender may be rendered null and void by your failure to disclose your bankruptcy.

In terms of walking the fine line between disclosing your status ad nauseam and keeping it a secret until it causes problems, you might want to speak with a bankruptcy attorney or with a support group for people undergoing financial management crises. With the appropriate language and communication skills and a sound investment/repayment plan, you can use your bankruptcy situation as a stepping stone for improved fiscal responsibility and ultimately better relationships with your creditors.