Identity Theft and Bankruptcy

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With so much of our lives being carried out online these days, identity theft is a plausible threat to many of us. But, are you responsible for what happens to your credit in the event someone steals your personal information?

One of the most common ways your identity is stolen is via a data breach. When a corporation’s security is compromised, it means thieves can gain access to your name, social security number, and your date of birth. Our SLC Chapter 13 attorneys have details on what hackers can do with your information, and what to do to recover.

How Identity Theft Occurs

In addition to mining data from company databases, identity theft can occur the old-fashioned way as well. Physical documents, including bank statements, identity cards, and even junk mail can lead to fraudulent use of your name.

Mail

Preventing identity theft is one of a few reasons to go paperless when it comes to billing. If you can keep documents with your personal information out of your mailbox, you eliminate one avenue via which thieves have access to your data. Or, if you prefer to receive bills or make payments through the mail, it’s beneficial to invest in a locking mailbox to protect your letters from theft.

Vulnerable Software

We do a lot of our banking and shopping online now. If our mobile devices and computers aren’t operating with the latest software updates, they can be more vulnerable to hacking. If your logins, passwords, and personal data are stored on your device, they are susceptible to misuse by thieves. Be sure you have a secure connection to the Internet, and consider implementing two-factor authentication to protect your accounts.

Discarded Documents

You could be doing everything right to safeguard your name, birth date, and social security number, but if you don’t properly dispose of physical documents, they can leave you vulnerable to identity theft. Before you toss a statement in the trash or the recycling, look again to see what data you’re sending into the world. All sensitive documents should be shredded to prevent thieves from being able to dumpster dive and procure the information they need to create fraudulent accounts in your name.

Of course, through no fault of your own, you can be robbed and have sensitive information stolen from you and used to negatively impact your credit. So, what should you do in the event this happens?

Recovering From Identity Theft

Once you realize someone has access to your personal information, and/or has racked up debt in your name, it’s time to start on the road to recovery. Much like when filing bankruptcy in Utah, you start by taking stock of the damage. Here are tips from SLC Chapter 13 attorney Rulon T. Burton and Associates:

Take Stock

Look over your bank accounts and credit card statements to see what charges have been made fraudulently. Having an itemized list of these charges will make it easier for you to report these crimes later.

To check if someone has used your personal information to open new credit accounts, you may have to run credit checks.

Freeze Your Funds

Thankfully, many banks, credit unions, and credit card companies automatically flag suspicious behavior on accounts. Sometimes they’re the first ones to notice unusually large transactions or attempted use of your cards in strange situations. Whether you notice the activity or your bank does, you need to freeze your accounts to prevent further unauthorized spending. This means that any debit or credit cards you currently have will no longer work, and you will be issued new ones while the fraud charges are investigated.

Reach Out

Once your funds are frozen, you’ll need to notify the companies at which your personal information was used to open fraudulent accounts. These creditors should work with you to rectify the identity theft situation. You should also update the payment information on existing accounts that actually belong to you, and consider changing your passwords.

Debt Forgiveness

You are not responsible for debt accumulated as a result of identity theft. Bankruptcy is a means of starting over financially, with the help of a trained, SLC Chapter 13 attorney. If you have taken the steps to report identity theft, you should not be held responsible for paying any debts owed as a result. Additionally, filing for bankruptcy after identity theft should be a means of having fraudulent debts forgiven.

Unfortunately, while your debts may be forgiven (whether you file for bankruptcy or not), sometimes your credit takes a hit. It can take a while to repair your credit after identity theft, which can affect your eligibility for things such as loans or renting a home.

Although recovering from identity theft is a lot to deal with, you’re not alone. According to Javelin’s annual Identity Fraud Survey, the total sum of fraudulent transactions in 2019 was $16.9 billion

If you have additional questions, turn to a bankruptcy attorney in Salt Lake City, Utah you can trust: Rulon T. Burton.

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