Bankruptcy and identity theft

When Florida residents are victims of identity theft, it is not unusual to have feelings of helplessness and frustration. This is particularly true when they find that the identity thief has been using their credit history to open credit and loan accounts in their name. If not caught in time, identity theft can cause significant damage to the victim’s credit score and may result in aggressive collection efforts.

In some cases, identity theft victims may wonder if filing for bankruptcy is the best way to remove these debts from their credit reports and stop creditor harassment. While bankruptcy may appear attractive, it may not be necessary to pursue this particular legal remedy. Consumer protection laws allow identity theft victims to challenge debts and credit taken out in their names and to request the removal of negative information from credit reports.

Identity theft victims should also consider that bankruptcy can have a negative impact on their credit history, although this impact can decline as time passes. Still, the bankruptcy would represent one more negative entry on a credit report, possibly exacerbating the situation. In addition, filing for bankruptcy does not necessarily stop an identity thief from continuing to use the victim’s information.

Identity theft victims who have already had debt issues may still decide to proceed with Chapter 7 or Chapter 13 bankruptcy, but they may want to first take action to notify creditors that many of their debts are illegitimate. From there, the identity theft victim may benefit from speaking with an experienced bankruptcy lawyer who may be able to advise them on a good course of action.