In the bankruptcy case of L.K.; In re, (Bankr. E.D.N.Y. 2009), a debtor's request to seal her records due to sensitive medical information revealed during the proceedings was denied; but the bankruptcy court agreed to conceal her identity in court records.
The details of the bankruptcy case:
A Chapter 7 bankruptcy debtor asked the bankruptcy court to seal her records because an adversary proceeding contained extremely personal medical information that if made public could make it difficult for her to find a job. The medical information revealed included a diagnosis of severe depression and psychiatric treatment.
The bankruptcy court refused to seal the records because they ruled that the information revealed did not rise to a "scandalous or defamatory" level. Instead, the court said that the medical information included in the bankruptcy documents could possibly hurt the debtor's future employment prospects due to the stigma still attached to mental illness and agreed to conceal her identity.
Many debtors are afraid to file bankruptcy because they are embarrassed by the information that will be revealed and/or fear that the information revealed during bankruptcy could affect their future employment prospects or their social standing in society. Fortunately, the bankruptcy court has put into place safeguards will take into consideration the harm information revealed during bankruptcy could do the debtor.