One of the most common questions asked of bankruptcy lawyers is about how a bankruptcy might affect a spouse or former spouse, or other relatives who have co-signed loans or are engaged in business with a prospective debtor in bankruptcy. Carmen Dellutri has written about some of those issues here. Most of my clients are most concerned that they protect their loved ones from any negative consequences of their financial distress. But what if you have a friend or family member who does not show you the same concern? What do you do if you suspect that your identity has been stolen by someone you know and care about?
Some authorities estimate that at least 25% of identity theft is carried out by a friend or relative. In my experience, there is a good possibility that those instances are vastly under-reported. I have had several clients over the years who have consulted me about how to handle the aftermath of such situations. While they were willing to try to settle the claims of creditors or even file bankruptcy to resolve the debts incurred by another, the one thing they were not willing to do was to report the theft.
The Identity Theft Resource Center has a Fact Sheet to help you work through the issues posed when you know the person who has used your identity, and identifies the following possible scenarios:
Case 1: “My adult daughter used my information without my knowledge to open several credit cards and buy a car. She hasn’t paid on any of these accounts and now the bank and credit card companies want me to pay. What do I do? I don’t want to see her go to jail.”
Case 2: “My father has a gambling problem. He opened several checking accounts in both my name and my brother’s name. Then he wrote bad checks for his debt. He’s 68 years old and my family thinks we should just pay off the debt. I know that if we do, he’ll just do it again. What do you advise?”
Case 3: “My ex-husband is using my 8 year old son’s SSN to open credit cards. He even got a driver’s license using his information. How do I stop him?”
Case 4: “My friend apparently went through my papers one day and found my SSN. She has several credit cards that she applied for in both of our names. I found out when I applied for a card and it was denied. She says she will pay off the cards but can only afford $20 a month. The credit card companies want all of it now. I can’t afford to pay these off. It is more than $10,000. What do I do? She won’t sign a letter saying these are really her cards because she is afraid they will arrest her.”
The ITRC will help you find the resources you need to handle the practical and emotional aspects of such a situation. I would add my own bit of advice. As soon as you suspect you have a problem, act quickly. Like most messes, this one is easier to clean up if you act quickly.
Most of us are most concerned with preventing identity theft. We buy shredders, we know better than to give out personal information, and most of us know to be cautious of internet phishing scams. But it is easy to overlook the obvious–people, usually those we care most about–who have access to our personal information. It is hard to face, but when you are going through a divorce or breakup, or when a friend or loved one is in the throes of addiction or illness, it is important to protect your personal information and check your credit report. No one expects such a betrayal, but you can act to minimize the effect if it happens.