For many individuals filing bankruptcy is a frightening experience.   This uneasiness is further compounded when people realize that the bankruptcy will open up all their financial details and information for scrutiny.  From credit reports to tax returns, no financial stone will be left unturned – and that can lead to some startling discoveries regarding identity theft.

“Over the past decade, identify theft has become a global ‘hot button’ issue,” says Jamie Miller, owner of Miller & Miller Law in Milwaukee, Wisconsin.  “Massive ‘hacking’ operations have exposed and provided access to the personal banking, credit and medical information of millions of people worldwide.   Using the stolen data, criminals can drain bank accounts and run up credit card debt, leaving the unfortunate victims stuck with the bills”. 

It’s important to remember that identity theft can happen to anyone, regardless of their financial standing.  To maintain the security of their personal information, consumers need to understand the best ways to protect their data during a bankruptcy.  Here’s what everyone should know when it comes to identity protection;

Working with a respected legal professional can help expedite your bankruptcy, while protecting your information before, during and after the bankruptcy. 

Order copies of your credit reports to see if any debts have been previously opened under your name without your consent.  While bankruptcy courts will dismiss most of your unsecured debts in a Chapter 7, it’s still important to review your financial history.  If someone has already stolen your identity, you want to make sure you report the issue and take steps to prevent the thief from continuing to run up debts in your name.

If you see errors on your credit report; accounts you didn’t open or debts you didn’t incur, dispute the errors with the credit reporting companies and the fraud department of each business.  Ask the credit reporting companies to block the disputed information from appearing on your credit reports. The credit reporting companies must block transactions and accounts if you are an identity theft victim.

As you contact businesses to make corrections, ask for copies of any documents the identity thief used to open a new account or make charges in your name.  For example, if you dispute a debt on a credit card account you did not open, ask for a copy of the application and applicant’s signature. During this process, make sure to note and save all correspondence with companies regarding the identity theft and charges. 

Don’t give out any information to debt collectors once you’ve started bankruptcy proceedings.  Legally speaking, debt collectors are not allowed to contact you once you’ve obtained an attorney to file for bankruptcy.   If debt collectors ARE calling you, tell them to call your lawyer and then promptly notify your lawyer about the debt collector’s actions.

It may be wise to invest in a credit monitoring service.  While many people operate just fine without credit monitoring services, having a vulnerable financial slate after bankruptcy may mean you need to take extra precautions to protect your identity.  Use a credit monitoring service that’s available through your bank or credit card lender, as these will offer you the most comprehensive service.

Finally, ensure that any credit offers you receive online or in the mail are through trusted lenders with a long history of working with bankrupt clients.  By being cautious about who you work with, you’ll stand a better chance of protecting your identity during such a vulnerable time.

Finally, rebuilding credit after bankruptcy is imperative – don’t let identify theft ruin your efforts.  Use the above tips to protect your identity before, during and after bankruptcy.