Why Bankruptcy Records Matter
Is your money market investor secretly bankrupt? Or what about the contractor building your family’s new dream home?
Wouldn’t it be awful if he had to quit in the middle of the project due to poor money management? And then there’s the guy who wants you to invest in his business. Is he dependable? Is he trustworthy? How in the world can you tell?
Wouldn’t it be nice to check out their financial status before you invest in them? To know they’re trustworthy before you rely on them? Well now you can! It’s all online and free of charge. Just take a look at their bankruptcy records! (But before you do, scroll down to the bottom of this blog so you’ll know how to use them.)
Bankruptcy records are an integral part of most background checks. A person’s bankruptcy petition can capture years of their financial activities. And it can include other information such as where they worked, how long they held a job, and what they spent their money on.
Knowing Why They Filed For Bankruptcy
Some bankruptcies aren’t the person’s fault. For example: A person could go bankrupt due to severe health problems, a natural disaster not covered by insurance, or a job loss during a major recession. When this happens, we can sympathize. These things could happen to anyone!
But often, bankruptcies show how someone messed up. It’s a long term record of the bad decisions they’ve made. For example: A Chapter 7 bankruptcy petition could show the debtor had uncontrolled spending; or that the debtor was unable to hold down a long term job, or that the debtor consistently made poor investment decisions.
So while we feel bad for someone who says they went bankrupt due to medical bills, we’re less sympathetic upon learning they overindulged in timeshares, high end furniture and flat screen TVs!
Knowing When And How Often They Filed
What we’re after is their character. We don’t just want to know what they did. We want to know who they are now. Are they trustworthy? Are they stable and dependable? Was this a one time screw up? Or is this person a walking train wreck? A bankruptcy of 20 years ago won’t tell us much. But a recent one can speak volumes.
So don’t count on someone being financially stable if they filed in the last three years. For one, their credit is shot. Also, people don’t change overnight. Assume the trouble they faced then is the trouble they face now. And you won’t always know what that trouble is. It could be impulsive spending, a drug habit, or as they claim, a fluke of circumstance.
Also look out for those who’ve filed for multiple bankruptcies. This could mean someone who files whenever the law allows them to. For example, the law says once you file for Chapter 7 personal bankruptcy, you must wait another 8 years to file again. So when did they file last? Are they about due for another one? (perhaps at your expense!) Likewise, a pattern of filings tells more about their character than say, a single bankruptcy.
Checking Out The Owners Of Small Companies
With small companies you’ll want to background the owners and officers. A big company often has checks and balances to prevent a single person from controlling it. But a small company is more likely to be dominated by a single person or several officers. So it’s good to know the character and past dealings of these people. And this means checking out their personal and business bankruptcies.
For example: I found a Georgia builder who filed twice for bankruptcy in 2013. He filed a liquidation bankruptcy (Chapter 7) for himself and then filed another Chapter 7 for his failing construction business.
That same year he launched a brand new construction company. But this time, he never listed himself as the owner! The guy knew a bankruptcy spoke volumes about his stability. So even though he was the true owner, he concealed his name so he could get a fresh start and hide his lousy track record.
I was able to trace him through his new website and other contact information. (All roads led to him and his defunct company). So if someone says they run a company but are not listed, be sure to check out their criminal records and bankruptcies! They could have good reasons for hiding under the covers.
More Reasons To Check Out Bankruptcy Records:
That said, it’s a good idea to check for bankruptcies when:
- Choosing A Business Partner (Do they manage money wisely?)
- Checking Out Tenants (Can they pay? Are they likely to become deadbeats?)
- Lending or Investing $ (Is the debtor/investor responsible?)
- Dating: Is the guy lying about his wealth? Will money management be a problem for him?
- Hiring For $ Sensitive Positions (if they can’t handle their $, why let them blow yours)
- Hiring Home Builders (what if they squander all the money and stop in the middle of the project)
- Investigating Small Companies (The company is only as good as its owner)
- Getting Full Disclosure:
What they don’t tell you is as important as what they do tell you. If they’re not disclosing the things you need to know, why trust them?
Where To Find Free Bankruptcy Records
There are three places to check for free bankruptcy records. These are:
- The commercial databases that offer you free teasers
- VCIS: Voice Case Information System (An Automated Phone System)
- PACER (Public Access To Court Electronic Records)
The Commercial Databases
These work best for recent bankruptcies. With just a name you can learn if the person filed, where they filed, when they filed, and if the bankruptcy was a Chapter 7, 11, or 13. Sometimes you’ll also get the debtor’s address. (For common names, this helps confirm you have the right person). I recommend you search several of these sites: They tend to fill in the gaps for each other. But no single site is complete.
Free Bankruptcy Records Through Bankruptreport.com
Aside from PACER, Bankruptreport.com is the best free website out there. But unlike PACER, you don’t need to sign up or log in. The only drawback is that the site is down a lot. So you may have to check back later in the day.
Use Bankruptreport.com for a nation-wide search for people who’ve filed for Chapter 7 and Chapter 13 bankruptcies. (Good from 2009 to the present.) For a demonstration, see the Sleuth For The Truth video Search For Bankruptcy Filings (Free Public Records).
Bankruptreport.com/Search (Best Way)
Enter a last name and first with no commas i.e. Smith John. Press the search button and once on the new page, scroll down manually or search by pressing CTRL and the letter F on your key board (Command F for Macs).
The pages are many screens long, so try a CTRL F search by a first name only or by whatever single term is least common to that page. Got several people with the same name? To find out where they filed, just mouse over the link you want: The Internet address at bot. left will show the state and city of the filing!
Note, if the screen goes blank after you search, it means either you entered the name wrong or your name isn’t in their database.
Free Bankruptcy Records Through Inforuptcy.com
To find free bankruptcy records through Inforuptcy.com,
advance to 3:31 on the Sleuth For The Truth video Search For Bankruptcy Filings (Free Public Records).
Voice Case Information System: Free Automated Phone System
This site has the phone numbers so you can call into a court’s automated system and search for bankruptcies by the person’s name. But there is a catch. You have to know what district court to call. And sometimes there are up to three districts in each state! But you can call wherever you think the person has lived. For more, see Age-The First Stop In Any Background Check.
PACER (Public Access To Court Electronic Records)
Both old and new bankruptcies are on PACER, a free service if you use it wisely. PACER provides access to the actual court filings, including the much talked about bankruptcy petition.
The bankruptcy petition is the hottest document you can find. The petition lists the names of their creditors, the amount of each debt and often the type of debt it is. You can even learn the jobs they’ve worked, how long they held this job, how much they’ve earned, the property they owned, and by inference, what got them into bankruptcy.
Establishing A Free PACER Account
They never bill you a single cent if you use less than $15 a quarter. It then resets back to $0. I’ve used this service for years and never been billed yet! And amazingly, you don’t even need a credit card to begin. With PACER you can lookup several bankruptcy petitions (large docs) or dozens of other smaller documents, all for free.
How To Do A PACER Nationwide Search On Federal Court Records Including Bankruptcies
PACER ain’t just for bankruptcies! To search other federal court records, (both civil and criminal) see the steps below.
2. Paste the link below into the address bar up top, so you can do a national search without selecting a district court.
3. Enter last name comma first, example John, Smith
4. Choose One of the tabs up top for either
All Courts or Appellate or Bankruptcy or Civil or Criminal or Multi District Litigation (MDLs)
For more on how to search PACER or set up an account, See the Sleuth For The Truth video Free Search For Bankruptcy Petitions: Who They Owed & How Much $ (PACER).
Reverse Lookups-Finding Them By Their Contact Info
Age-The First Stop In Any Background Check
Google Like A Pro (Quick Tips & Tricks)