Can Bankruptcy Result In Identity Theft? Part I of II

17 Feb Can Bankruptcy Result In Identity Theft? Part I of II

Yes, if you are not careful! As a matter of law, your social security number in your bankruptcy file should not be viewable by the public. While you must disclose your social security number to the Bankruptcy Court, this number remains confidential and must stay off all public documents. But this does not always happen.

Recently, it seems that many proof of claims in the Bankruptcy Courts are being filed with confidential information such as social security numbers, date of birth, and prior employment/address information. This information must be redacted in all documents filed with the Bankruptcy Court. If it is not redacted, these creditors are violating the law.

Virtually all the Bankruptcy Courts now have local rules forbidding the publication of confidential information such as social security numbers. In addition to that, there are other state and federal laws which also prohibit publication of the same. In the Southern District of California Bankruptcy Court, we recently filed suit against a credit union for the improper publication of confidential information. Suit was filed under the Gramm-Leach-Bliley Act, Bankruptcy General Order No. 168 dated 11/24/2003, California Civil Code 1798.85 (A)(1), Invasion of Privacy, and Tort in Se. While this litigation is pending, it appears that our local judges are not happy with such creditor conduct.

In another similar case, we moved to restrict public access on a proof of claim that contained confidential information. The judge signed the order immediately. We then started to prepare a lawsuit against the offending parties when all of a sudden, the Judge issued the following order to show cause:

Pursuant to 11 U.S.C. Section 105, it is hereby ordered that:

First Future Credit Union and KeyPoint Credit Union are ordered to appear before the Honorable Laura S. Taylor, Judge, United States Bankruptcy Court on March 20, 2008 at 11:00 a .m., in Department No. 3, Room 129, Jacob Weinberger United States Courthouse, 325 West F Street, San Diego, CA 92101-6991 to show cause why First Future Credit Union and KeyPoint Credit Union should not be cited for contempt of Court or otherwise sanctioned in connection with the following:

On January 29, 2008, and February 1, 2008, proofs of claim were filed in the above referenced case on behalf of First Future Credit Union and KeyPoint Credit Union, respectively, disclosing private information in violation of Rule 9037 of the Federal Rules of Bankruptcy Procedure and Bankruptcy General Order No. 168 dated November 24, 2003, United States Bankruptcy Court, Southern District of California.

Any opposition to this court’s order to show cause must be filed with this court and served in accordance with Bankruptcy Local Rules on all interested parties no later than March 10, 2008.

So in that case, we are not even going to file suit, but rather, simply submit a reply to the Credit Union’s Opposition, to request actual damages, attorney fees, and costs.

So what is the harm in publishing this information? Read about it in Part 2.

Written by Michael G. Doan

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