In this article, we’ll cover the topic: “How to Find Out If Someone Filed for Bankruptcy?”
To tell you briefly, bankruptcy under the Federal Law is a debt solution available to an individual who is overwhelmed with debts and is no longer capable of paying it back. Usually, an individual files a case of bankruptcy when he has surpassed all ways, and repayment methods entrust the court’s responsibility.
Together with an attorney and trustees of bankruptcy, try to overcome the debts through various methods and following specific rules.
How to Find Out If Someone Filed for Bankruptcy?
All bankruptcy courts fall under the Federal Courts, and that is where all the hearings take place. “Pacer” is the website with all the federal courts’ locations and is open to the public. All the hearing and bankruptcy records are updated on the website regularly.
However, complete information may not be available on the portal. For instance, the bankruptcy files can be used against the person in a criminal trial as well. If not available, you can try to get the credit report. Not everyone gets the credit report, except for employers and potential lenders.
If you are a creditor, you may find out that your debtor has filed a bankruptcy case, either through their attorney or through a legal notice from the court.
It is essential to remember 2 points before looking for bankruptcy records:
- Firstly, the reason, you will need to understand the main factor of filing this bankruptcy. For instance, it can be a student loan over a credit card overspending.
- Secondly, the period- you will have to consider the time when a person/business filed for bankruptcy. For instance, a person who has filed for bankruptcy almost 20 years ago will be in a better position than a person filing it last year.
So, it gives away a lot of valuable information about the finances.
Why should I know if someone has filed for bankruptcy?
Although it is not mandatory that you need to find out about someone’s bankruptcy details, but in a few cases, when you are to make a financial decision with someone, it is essential to know the financial condition.
Here is a list of few common reasons:
1. Potential business partner
When you are planning to set up a new business, and you have a partner to share your ideas and thoughts. When you plan on investing in the concept, it’s best practice to determine your partner’s financial details. For instance, if your business hits a loss, and your partner has already undergone bankruptcy recently, you will have to take the responsibility of paying all bills and credits alone.
2. Lending money
If you are a moneylender, it should be your precautionary measure to find out about each of your lenders, their income, past credit history, current debts, if any, expenses, and most importantly, history of bankruptcy. Once you know the lender has undergone a bankruptcy, you can decide whether to lend the amount or not and if yes, shall it be on a higher interest percentage? Often lenders do this to gain trust and protect themselves from any loss.
3. The financial history of a business
If you are to invest in a business, it is evident that you will have a quick background check on the owners, profit and loss statements, and, most importantly, the current market value. When the business is bankrupt, the valuation falls, and there are fewer investments.
At times people try to find out if you are bankrupt, just out of curiosity. And if yes, what was the cause for the financial crisis. It can be a friend, a colleague, or someone in the family who has recently filed a bankruptcy case but are hesitant to speak. You can find out the details as it is available to the public. However, you will need a few details of the person/business to extract that data.
What details do I need to find out if a person is bankrupt?
To look for a person/business’ bankruptcy details, you need to have these mentioned details:
- The person’s legal name along with SSN (Social Security Number)
- If it’s a business, then the Tax Id number
- The case number of bankruptcy.
When you have extracted these details, you can check if a person is bankrupt. In case of physical inquiry in the courthouse, this process may take a few hours.
Agree or not, it is essential to know the financial status of a person/business before you choose to get involved. You can look for the details also on the website of Individual Insolvency Register (IIR).
Check out this short video for more information on How to Find Out If Someone Filed for Bankruptcy