Identity Theft: Another “Somebody Done Somebody Wrong” Song in Bankruptcy Court

26 Oct Identity Theft: Another “Somebody Done Somebody Wrong” Song in Bankruptcy Court

Identity theft. Folks worry about it all the time. Most times, folks worry about credit card numbers being stolen, accounts “hacked”, accounts opened under your name without permission. There are procedures that can be followed when a person discovers their identity has been stolen. TheFederal Trade Commission and Better Business Bureau register complaints aboutidentity thieves. But, when identity theft occurs in bankruptcy court,the impact can be severe. An example of this impact was reviewed by the Bankruptcy Court in the Northern District of Texas in the In Re: Dick case. Ms.Dick’s boyfriend assumed the role (pun intended) of the Dick debtor in a Chapter 13bankruptcy case, underMs. Dick’s name, without her consent or authorization. Notonly did Ms. Dick did not file for bankruptcy; Ms. Dick was unaware that a bankruptcy had been filed until after the case was dismissed for failure of the alleged Dick debtor to file documents. The case was filed in late 2005 and Ms. Dick discovered the filing in March 2006.

Ms. Dick asked that the bankruptcy court reopen the case and then expunge any record of the filing of the case. The N.D. Texas Bankruptcy Court held a hearing and then the judge issued a decision: that the bankruptcy case could be flagged but that thefiling could not be expunged or deleted from the court’s official records. Testimony was presented at the hearing that it most likely was Ms. Dick’s former boyfriend who had filed the bankruptcy. The boyfriend had been assisting her with paying for the mortgage on her condo when her work hours had been cut and then interfered with mail notification of default from the mortgage company. He may have also used her credit cards. Interestingly, the court file had copies of the boyfriend’s photo identification from when the petition was filed; the Court noted that her story was believable that she had not filed the petition as if it had been done personally by the debtor, no copies of identitfication would have been made by the clerk.

The judge noted that he believed the record should be expunged but felt he lacked authority to do so. He ordered the strongest possible wording to be placed on the name of the file (UNAUTHORIZED BANKRUPTCY FILING), but Ms. Dick is offered little comfort. The judge stated that he lacked the authority to order the three credit reporting agencies to delete the record. Therefore, at the end of the day in bankruptcy court, Ms. Dick’s credit had been affected by the (former) boyfriend whose whereabouts were then unknown (also noted by the judge).

Ms. Dick testified that the boyfriend had access to her financial information during their relationship. Others can prevent such an event from happening by safeguarding their personal and confidential financial information (as well as their hearts) at all times. Monitoring your credit reports on a yearly basis, if not more often, is essential. An identity theft affidavit should be filed with local law enforcement and with the three credit reporting agencies (Experian, Equifax, and Transunion) as soon as the theft is discovered.

Federal Trade Commission Identity Theft Affidavit

An interesting question would be: Does any other court have the ability to order the three credit reporting agencies to delete the notation of bankruptcy filing on Ms. Dick’s credit report. I believe that the federal district courts (non-bankruptcy) do have that authority. A reveiw of the District of Texas’s dockets does not show that Ms. Dick filed a civil case requesting that order.

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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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