Disclaimer: The below is solely intended for informational purposes and in no way constitutes legal advice or specific recommendations.
If you’re making an important financial decision that includes doing business with another person, knowing if that individual filed for bankruptcy is an important step to ensure your safety. You may want to check up on them for your peace of mind, and bankruptcy records can offer important insight into whether or not you are making a smart investment. Common reasons to look into bankruptcy records include: checking up on the financial history of a business partner, considering helping a friend or relative in a time of need, knowing more about the financial history of a business, or simply to learn why someone filed for bankruptcy in the first place.
Knowing the reasons behind why an individual or business filed for bankruptcy is equally as important as knowing the fact itself. The context in public records can provide a more detailed picture of a person’s financial health and history. For example, someone declaring bankruptcy because of outstanding student loans may not be viewed the same way as someone filing due to credit card overspending. Similarly, a person who declared bankruptcy decades earlier is not necessarily in the same financial position as someone who did so a year ago.
Considering that bankruptcies are public records, a simple online search may be able to reveal if a person has or has had financial issues. To search bankruptcy court records, some authorities may require and request the person’s name or social security number, file’s case number, or, if you’re searching for a business, the entity’s Tax ID number. You can use this information to search online or through physical federal courthouse documents. Remember: as with any set of public records, it is quite possible that not all the information you are seeking will be available online.
If you base your bankruptcy search on just a name and it yields too many results, you may be asked to refine your search. You can do this by providing the state in which the filing was made, the kind of bankruptcy it was, or by narrowing the time frame (if this is offered as a search parameter). However, while being specific in your search may seem like the best idea, this won’t always get you results: clerical error and misinformation are just some of the reasons why records may not be digitized accurately.
Alternatively, an easier method is to perform a simple background search, which may reveal any or all bankruptcies for which an individual filed. Bankruptcies remain on an individual’s credit report anywhere from 7 to 10 years and in some consumer background checks for longer periods of time. For this reason and others, not all applicable information may be available online, though these online records are generally updated as often as daily.
There are several different types of bankruptcies related to people or a business that you can search for, and knowing each type can help you understand the reasons why they were filed. Chapter 7 is the loose name for liquidation bankruptcy for individuals and businesses. Chapter 11 is also known as reorganization or rehabilitation bankruptcy, which is primarily used by business debtors. Individuals who have assets but also outstanding debt may also file for this type of bankruptcy. Chapter 13, or repayment plan bankruptcy, is for individuals who have a steady stream of income, or for businesses that want to reorganize. There are several others, but Chapter 7 is the most common type of bankruptcy for individuals, and Chapter 11 is what most businesses may file.
Bankruptcy cases are heard by a system of federal courts (United States Bankruptcy Courts), which can be found in all fifty states, the District of Columbia, Guam, and Puerto Rico. The records may contain information to which you may not already have access, such as the judge who presided over the case, the type of bankruptcy filed for, the attorney’s name, and the amount for which the debtor is liable.