Bankruptcy expert Leon Bayer answers real-life questions.
I am getting ready to file bankruptcy. Obviously, it is something that I am not proud of. Some people have told me that I will have to publish a notice in the newspaper saying that I have gone bankrupt. That would be embarrassing. Is there any way I can get around it?
Don’t worry. There is no such requirement in modern American bankruptcy law. However, there was a time in legal history when such a notice was required. Perhaps that is the reason some people think that a bankruptcy notice has to be published. Actually I get this question quite often.
A Bit of Bankruptcy History
In 1712 the British Parliament passed “An Act to Relieve Insolvent Debtors.” One feature of that law imposed a legal requirement to print a notice in a newspaper advertising the meeting of creditors in every bankruptcy case.
The reason behind the requirement was not to shame the person filing. Instead, it was to prevent secretive proceedings for the benefit of insiders seeking to defraud other creditors who had not received notice.
The publication rule was a great benefit to newspapers, who charged for printing the notices as advertisements. The most prominent of such papers is the London Gazette, which is the first newspaper to be regularly published in London, and is still in business.
No Publication of Bankruptcy Filing
Unless you are a celebrity or a public figure (in which case the gossip magazines will be sure to talk about your filing), I’m pretty sure no one will care about your bankruptcy nor will it appear in any newspaper or magazine.
Of course, future lenders and creditors will care, and will see it on your credit report. But you can take steps to rebuild your credit after bankruptcy in order to minimize its impact.
Leon Bayer is a Los Angeles bankruptcy attorney. He is a partner at Bayer, Wishman & Leotta, a California law firm specializing in bankruptcy. The opinions and advice in this blog post are from Mr. Bayer alone, and should not be attributed to Nolo. By answering a question on this blog, Mr. Bayer does not become your lawyer.