Identity theft occurs when someone uses your personal information to create new accounts for their financial benefit, racking up debt in your name. Unfortunately, the situation impacts over a million people each year in the U.S., resulting in over $3 billion in losses. Facing such significant financial damage leads many people to consider utilizing bankruptcy law tactics. Here’s a closer look at what’s involved.
How Identity Theft Impacts Finances
When a thief opens an account in your name, it’s tied to your Social Security Number. As a result, their actions directly impact your credit score. The amount of debt, number of accounts opened, missed payments, and collection accounts are all used to calculate this score.
Identity thieves not only open new credit sources, but they also rack up the accounts until they’re maxed out and never pay the bills. These elements are reflected on your credit report, causing a serious drop in your score. A low score can make it difficult to find a lease, access lines of credit, and even be hired in some industries.
How Filing for Bankruptcy Can Help
You can dispute the charges and work with each creditor to remove the accounts. However, the burden of proof lies on the victim, so the process is often time-consuming and requires numerous rounds of contact and filing documents to argue the case of identity theft. As such, it can take years before all the damage is undone.
Approaching such a significant hurdle and timeframe is why some individuals decide to file for bankruptcy. Many common types of identity theft debts are unsecured, like credit cards. These items usually qualify for elimination under bankruptcy law. As a result, filing for Chapter 7 bankruptcy can help wipe them away completely, providing a clean slate to move forward.
How to Prevent Identity Theft
Online thieves are incredibly common, so it’s important to incorporate a security-based mindset into your daily internet usage. Never share personal details online, including your full name, birth date, and Social Security number. Don’t access banking or investment accounts when on public Wi-Fi, and install reputable anti-virus and anti-malware software on all computers.
When a situation does happen, work with a lawyer to determine your options and the best legal steps to take next. Additionally, report the instance to the appropriate channels, like the Federal Trade Commission.
If you’ve been affected by identity theft in Hamden, CT, or the surrounding towns, contact Steven P. Ciardiello Esq, PC, to learn about your legal options. These local attorneys will help you achieve a fresh start through their bankruptcy law services, including foreclosure prevention. Find out how the dedicated team can assist your case online or by calling (203) 248-8000.