Bankruptcy can be scary. There are a lot of rumors about bankruptcy, some of them are true, some not. One of the things people fear for the most is the lost of their privacy. They don’t want people to know they’ve filed bankruptcy and they don’t want people from the court going to their house or snooping through their things.
When you file for bankruptcy, everything you own becomes part of your “bankruptcy estate”. A trustee of that estate is appointed by the court who sifts through the property listed in your schedules, uses his or her experience to judge it’s reliability and as long as it passes the smell test, the trustee administers the estate and you can go on without having people poke in your business. However, if you fail the smell test because the trustee thinks something stinks in your schedules, he or she can petition the court to permit an appraiser to visit your house. This is typically done because your Schedule B (Personal Property) list either omits property the trustee suspects you actually have or because you have seriously undervalued the property on Schedule B so as to keep more property than you would otherwise be exempt.
If an appraiser is to visit your home, the inspection is typically scheduled with you so as to make the appointment as convenient as possible. The appraiser creates an independent list of all of the property there that has value. This appraisal is then given to the case trustee who may use it as evidence against the bankrupt.
Another way in which privacy comes into question is considering who can learn that someone filed a bankruptcy case. Technically, a bankruptcy filing is public information. Certainly people you owe money to or with will get notice, and if a person has enough desire to put in the effort, they can discover if their friend, co-worker, etc. has filed a bankruptcy case. It isn’t as easy as typing a name into Google and pressing search. A special account must be set up and a credit card is required to do this. That card is billed about $0.08 per page viewed. Since the average bankruptcy petition is about fifty pages, it can get expensive to look up multiple people.
Generally, it’s safe to say that yes, the fact that you’ve filed is public: people can find out and yes, the court can send someone to invade your home. Neither of these is particularly likely, but they are both possible.
If you have more specific questions about your privacy when filing bankruptcy, contact a Amelia Island Bankruptcy Attorney or call us at (904) 685-1200 for a free consultation.