Does it Make Sense to File Bankruptcy Due to Identity Theft?
In many instances of identity theft, the victims aren’t aware there is a problem for months or even years after the problem starts. The longer the problem goes on unchecked, the more severe the consequences can get. Many victims find themselves with frozen bank accounts, drastically increased interest rates on credit accounts, increased minimum payments on credit accounts, etc. The issue is so invasive that many identity theft victims will find themselves feeling the ill effects on their overall health due to the stress that comes with having your identity stolen. Some think they may need to file bankruptcy due to identity theft.
Bankruptcy isn’t the only option. And it shouldn’t be the first option considered. Just because you’ve had your identity stolen doesn’t mean you should automatically file for bankruptcy. Bankruptcy may very well be the easiest way to resolve the issue because if you qualify, all fraudulent accounts will be wiped out. Still, before you consider the potential benefits of filing for bankruptcy, you should try to fight the identity theft.
1st: Breath and stay calm. The process isn’t quick. You’ll need to dedicate a lot of your time and energy to resolving the issue. Be patient.
2nd: Set a goal and make a plan to get there. Start your research with the Federal Trade Commission. Their web page regarding identity theft is the perfect jumping off point when figuring out how to get any fraudulent accounts cleaned up.
3rd: Order your credit reports. Get a report sent to you from each of the three major credit unions: Experian, Equifax, and TransUnion. This should provide you with an accurate listing of your accounts, both valid accounts and fraudulent accounts.
4th: Put a fraud alert in place with all three of the major crediting reporting agencies. This will provide notification to future creditors that you were a victim of identity theft in the past.
5th: Access each of the credit reporting agencies online and dispute each fraudulent account directly.
6th: File a police report; it only takes a few minutes. Creditors will require this when you dispute any fraudulent accounts. Make a number of copies of the police report.
7th: Call your creditors one by one. Keep a log of each individual/representative that you speak to and confirm which documents they have received. Follow up with them weekly. Be polite; even if creditors act as if they don’t believe you. Documents will sometimes get lost. Be patient. Send them repeatedly if necessary.
8th: Once you’ve successfully corrected some of the fraudulent accounts, you can start contacting your legitimate creditors. Many will work with you in light of the evidence you have of fraudulent activity. You could see some reduced interest rates, and possibly even a restoration of positive credit history on your credit report.
9th: In some cases, you may be required to complete a fraud affidavit and get it notarized.
Fighting to restore your credit once you have had your identity stolen may seem like a daunting task. It’s certainly not easy. But with each small success you are closer to resolving the bigger issue. It might help to think about the fact that you aren’t alone. Identity theft is now a common occurrence.
If resolving the identity theft through traditional channels isn’t going to work for you or you feel that bankruptcy might be the best option, contact the southern California bankruptcy experts at Westgate Law.