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Identity Theft

Identity theft is a growing problem that can affect many areas of our lives, including employment and bankruptcy.  Due to popular and humorous television commercials by credit card companies, people are becoming more aware of identity theft in situations such as where a person uses your name and credit card account information in order to make illegal purchases and leave the real person stuck with the bill. 

However, people are not as aware of other forms of identity theft or other reasons identity thieves do what they do, such as filing fraudulent bankruptcies, leaving the real person with a black mark upon their credit for ten years; opening credit accounts in the person's name; avoiding child support garnishments by supplying the wrong Social Security Number, which could result in an innocent person's wages being garnished.  Even scarier is that an identity thieve who gets arrested may supply the name and other information of an innocent person and then get convicted of a crime under that name -- which could create a criminal justice nightmare for the innocent victim.

Identity Theft and Employment

How does identity theft affect the realm of employment?  For one, people without the legal right to work in this country sometimes steal either a social security number and/or a person's name in order to work.  While an employer who lawfully reports its taxes should discover situations where the name and social security number do not match, the employer may not catch the problem if the worker is unlawfully using both the name and social security number of another person.  This can create obvious problems for the victim of identity theft, including bad credit, wage garnishments, criminal records -- all to a completely innocent person.

Further, an employer who knowingly or sometimes even unwittingly hires a person who is unlawfully using another person's identity could be leaving itself open to a wide variety of legal problems, including civil and possibly even criminal liability, for everything from negligence to tax evasion to aiding & abetting.  Employers are wise to consult an employment law attorney to ensure that the company is following good hiring practices that comply with the law and reduce the risk of liability of a lawsuit.

Individuals who have been the victim of identity theft should likewise consult an attorney experienced in handling identity theft matters.  The following website, published by the State of California, can provide more information about what to do in the event you believe you have been a victim of identity theft.  While it is intended for residents of California, it has quite a bit of helpful information.  Nonetheless, we recommend that you speak with an attorney before relying on any of the information contained on the site.

California Office of Privacy Protection
www.privacy.ca.gov

Identify Theft and Bankruptcy

There are myriad ways in which identity theft involves bankruptcy.  The United States Department of Justice gives the following examples of bankruptcy-related identity theft:

• Filing for bankruptcy using the name and/or SSN of another known person, such as a parent, sibling, child, or other relative; a spouse, ex-spouse, "significant other" or ex-significant other; a current or former business partner, co-employee, cosigner on a debt, friend, neighbor, or fellow student; or even a deceased person.

• Incurring debt under a false name and/or Social Security number and then filing for bankruptcy, using that name and/or number, to discharge the debt. Sometimes this debt is owed to the government, via a farm loan, small business loan, student loan, or similar obligation.

• Transferring property into the name of a relative or friend, and then filing for bankruptcy using that person's name and/or SSN to avoid foreclosure. Typically the transferee agrees to the transfer "to help out," but does not understand the legal ramifications.

• Filing for bankruptcy using a false name and/or SSN that was apparently randomly chosen, because it does not belong to a person known to the perpetrator.

• Transferring a fractional interest in real property into the name of an innocent person whose bankruptcy case is pending. The pending case stays foreclosure on the perpetrator's real property once the innocent debtor is listed as a partial owner.

• Using a false SSN when identifying oneself as a bankruptcy petition preparer.

Often, bankruptcy cases are filed under a false identity to obtain the benefit of the automatic stay, for example to delay eviction or foreclosure proceedings.  The U.S. Trustee has implemented procedures to avoid identity theft in bankruptcy filings, such as showing a photo ID and requiring proof of Social Security Number.  Our office fully supports the new identification procedures and requires our clients to provide us with their correct name and Social Security Number.

We also have experience in dealing with creditors who wrongfully try to collect from identity theft victims.  If you believe someone has stolen your identity, ask us how we can help you.