Bankruptcy and Identity Theft: Protect Your Confidential Data

26 Sep Bankruptcy and Identity Theft: Protect Your Confidential Data

Bankruptcy and identity theft? How can this be an issue if someone is discharging debt? There are debtors who file for bankruptcy protection due to someone having stolen their identity. There are bankruptcy debtors whose identity is stolen and the thief files for bankruptcy. Then, there are those folks who worry about their identity being stolen while in bankruptcy due to creditor’s who treat confidential information casually. When creditors release confidential data in public records, identity theft risk increases dramatically. What can the average person do to protect themselves, whether in or out of bankruptcy court?

In the September 2011 issue of Money, Ann Carrns provided excellent steps that could be taken by the average person to protect their identity from being stolen in her article, “Defend Your Data After a Breach.” Ms. Carrns pointed out that the Privacy Rights Clearinghouse had tracked 313 corporate breaches of data by hackers or by compromising confidential information by the corporation — during the first 8 months of 2011. While only 4% of Americans have been the victims of identity theft, Ms. Carrns reports that when a breach is involved, that statistic jumps to 17%, or nearly 1 in 5 persons.

Ms. Carrns recommends the following if you are notified of a breach in your personal confidential data:

1. Password. If your password is compromised, change it immediately. Make each account’s password unique.

2. E-mail Address: The main risk is phishing attempts — where an email purportedly from one of your creditors asks for a response which provides confidential information or other data. If you are suspicious of any email, call the creditor or company instead of responding to the email.

3. Credit Card number: Monitor your accounts. If you are notified of a breach by a credit card company, ask for a new account number and card.

4. Debit or Bank Information: If your debit card number is compromised, cancel that card and cancel the PIN. If the account number is compromised, close the account and open another with a new number. Ms. Carrns suggests asking for a flag to be put on the account for a verbal password.

5. Brokerage Account Information: If account number is exposed, close that account and get another with a new number.

6. Social Security Number: Get a fraud alert on your credit report to let lenders know to request additional information if any new account is attempted to be opened. A regular fraud alert will last for 90 days and can be renewed. A more rigid alert, a “security freeze” prevents anyone from opening any new account (even you). The freeze has to be removed in order to open a new account. There is a fee for a security freeze.

7. Credit Report Monitoring. If any of the above breaches happen, you may be offered free credit report monitoring. There are services that also provide this service for a fee. At the very least, you should obtain a copy each year of your credit report. You are entitled to one free copy each year, available at www.annualcreditreport.com.

As my colleague, David Leibowitz’ article on this site states, redaction is the answer. If you receive notice that your confidential information has been released in a document filed in the bankruptcy court, consider taking the steps outlined by Ms. Carrns to protect yourself from future identity theft problems.

 

 

photo credit: immagine.com/stockconnection

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I'm a consumer protection lawyer in Oregon, working with people in Klamath; Lake; Jackson; Josephine; Curry; and Deschutes County. I speak regularly on bankruptcy and consumer protection issues nationwide.
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