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Victims File Bankruptcy

People file for bankruptcy when they accrue substantial debts they cannot repay. But what if you’re being asked to repay debts that aren’t yours? Should you file for bankruptcy? This is a complicated issue, and there’s no set-in-stone answer. Your best course of action is to talk to a bankruptcy lawyer about your options. Yes, bankruptcy is an option, but you may need to take additional steps regarding the identity theft.


Taking Action After Discovering Identity Theft

Even if you’ve just recently discovered that you’re a victim of identity theft, hopefully you’ve already changed your passwords, filed a notice with your bank, and requested new debit and credit cards. You should also file an FTC report. This is an important way to document the crime. Save a copy of the report for your records. Next, send a letter to the debt collector informing them that you did not open the fraudulent account or make the fraudulent charge. Enclose a copy of the FTC report. You can use the FTC’s identity theft letter template.


Being Proactive About Fraud Alerts

In most states, your maximum liability for fraudulent charges is zero if you report the loss of your debit or credit card before a fraudulent charge is made. If you report it within two business days, your maximum liability is $50. Because timeliness is of the utmost importance, you should be proactive about detecting fraudulent activity. Contact Experian, TransUnion, or Equifax and ask that the credit bureau place a fraud alert on your credit report. Whichever agency you contact will then contact the other two bureaus and have them establish a fraud alert too.


Considering Whether to File for Bankruptcy

Although you should only have limited liability for fraudulent charges, not every case is cut-and-dried. If it’s not possible for you to get out from under fraudulent debts, it’s time to talk to a bankruptcy lawyer about your options. When deciding whether to file for bankruptcy, you should consider these factors:


  • The amount of the debt
  • The impact of the unpaid debt on your credit history and score
  • The impact of bankruptcy on your credit history and score
  • The aggressiveness of the debt collectors
  • The emotional stress of the debt


At Cutler & Associates, Ltd., our seasoned lawyers have handled all sorts of bankruptcy cases—from the straightforward to the intricately complex. Families in the greater Chicago area are invited to contact our law firm in Aurora or Schaumburg at (847) 961-4572. We’ll review your case and offer personalized legal guidance for your situation.