Discharging debts in bankruptcy means that a debtor is no longer required to pay those debts. Debs are either discharged and assets sold to pay the creditors, or the court creates a repayment plan for the debtor to repay debts in a way that is more manageable based on their current income and finances.
The court enters an order that prohibits creditors to attempt to collect the discharged debts via legal action, telephone calls, letters, or other forms of contact.
There are a variety of reasons why someone might file for bankruptcy. Some of the more common reasons include:
- Medical expenses
- Overextended personal lines of consumer credit
- Marital problems, such as divorce or separation
Filing for bankruptcy is generally not a decision people take lightly, but the fact that someone has taken that route to get out of debt might be of interest to other individuals who have an interest in their financial history and current financial health.
Bankruptcy cases are exclusively the jurisdiction of federal bankruptcy courts. Bankruptcy records are public information and can be helpful for making financial decisions. There are several reasons why you might want to find out if someone filed for bankruptcy. Some of the more common reasons are:
- Researching the financial history of a potential business partner;
- You need to determine whether it is a smart decision to loan money to someone; or
- You are interested in the financial history of a business.
When researching whether someone filed for bankruptcy you probably want to look into and consider when someone filed for bankruptcy and the reasons for it. A more recent bankruptcy filing indicates a more unstable situation than one that is several years old. In addition, filing for bankruptcy because of outstanding medical debt suggests a different financial situation than someone who files because they overspent on too many credit cards.
Can I Look Up Online If Someone Filed for Bankruptcy?
All of the documents filed in a bankruptcy proceeding are available as public record. You can use the Public Access to Court Electronic Records (PACER) service to look up bankruptcy records online. All that is needed is an account to search and locate bankruptcy court cases. PACER charges a fee for each page that is viewed using the system.
If you know the case number you can do a bankruptcy case number search to find the information you need. Using the case number, complete name, or social security number, you can call a toll free number to reach an automated system and access the following information:
- Case number;
- Name(s) of debtor(s);
- Date the bankruptcy case was filed;
- Which chapter the bankruptcy petition was filed;
- Name and phone number of the debtor’s attorney;
- The name of the bankruptcy trustee;
- Name of the assigned judge;
- Discharge and closing dates;
- Whether there are assets;
- Case status; and
- Case disposition.
What Information Do I Need To Find Out If Someone Filed for Bankruptcy?
Very little information is required to start researching whether someone has filed for bankruptcy. Bankruptcy petitions are filed in bankruptcy courts, which are federal courts. Therefore, you need to locate the federal district court where the person you are interested in resides. Then you can call the court and obtain the case number using the person’s full name, social security number, or, if you are looking into a business, the tax ID number.
With the case number you can use the PACER system to access additional information online. You can also go to the courthouse in person and access the bankruptcy record there.
What Types of Bankruptcy Should I Look For?
Individuals and businesses can file for several different types of bankruptcy depending on the reasons for filing.
Some of the common types of bankruptcy include:
- Chapter 7: Chapter 7 is liquidation bankruptcy for individuals and businesses. This is the most common type used by individuals. In a Chapter 7 bankruptcy the court appoints a trustee who oversees the liquidation, or sale, of the debtor’s assets. The proceeds of the sale are used to pay off the creditors. Unsecured debt that remains after the funds have been exhausted is usually erased. Student loan debt and unpaid fines and taxes are not erased.
Chapter 7 bankruptcy is only available if the court determines that the debtor does not have enough income to pay their debts.
- Chapter 9: Municipality bankruptcy claims are filed under Chapter 9. This is a reorganization or repayment plan for towns, cities, school districts, etc.
- Chapter 11: Chapter 11 is large reorganization or rehabilitation bankruptcy. This is usually used by business debtors and sometimes by individuals with large debts and numerous assets. A business will create a plan to pay off their debt while continuing to operate the business. The court and the creditors must approve the plan.
- Chapter 12: Rehabilitation bankruptcy for family farmers and fisherman. Chapter 12 allows the debtor to keep assets and avoid foreclosing on their property.
- Chapter 13: Chapter 13 is repayment plan bankruptcy for individuals with a steady stream of income and for businesses looking to reorganize. Chapter 13 bankruptcy does not forgive the debt like a Chapter 7 bankruptcy. It allows a debtor to pay back their debt over a period of time depending on the amount of debt and their income. The debtor is able to keep their assets in a Chapter 13.
- Chapter 15: Used in cases with foreign debtors, giving them access to the U.S. bankruptcy courts.
Regardless of the type of bankruptcy that was filed, it can be searched the same way. The easiest way is using the online PACER system to access bankruptcy documents. You do not need to know which chapter the bankruptcy was filed under to search online for the record.
If you know the name of the individual or the name of the business, you can begin the search for bankruptcy documents. Chapter 7 bankruptcy is the most common type of claim for individuals. If your search reveals that the person you are looking into filed for Chapter 7 bankruptcy, you will know that their debts were likely more of a personal nature than business related.
Do I Need a Lawyer to Find Out If Someone Filed for Bankruptcy?
Searching bankruptcy records is usually a straightforward process. The information is a matter of public record and is readily accessible, either in person or online.
However, if you are interested in an individual or business’s bankruptcy history because of a legal dispute or because you are potentially going into business with them, it is a good idea to contact a bankruptcy lawyer to advise and assist you.
An experienced attorney can help you access and obtain the necessary information contained in the bankruptcy record so that you can make an informed decision regarding your dealings with the individual in question. Bankruptcy records are often used as evidence in court proceedings. A bankruptcy lawyer can help you sort through the documents and determine what is relevant in your particular circumstances.
Lastly, if any legal issues or disputes arise, an attorney can provide you with the advice and representation needed to protect your interests in the event of a lawsuit.