How much information is too much information? Many times clients ask me why we need so much information about them “just to file Bankruptcy.” That is when I go on to explain that Bankruptcy is a very serious process and there are many pitfalls for an individual if one fails to disclose all of his or her assets. Sometimes, people make innocent mistakes by failing to disclose an asset that they don’t think is important. If you feel like your bankruptcy attorney is asking a lot of questions, please note that this is a good thing! We may ask you to fill out lengthy questionnaires but we are doing it for you own good. We are simply trying to keep you from making a mistake that could lead to loss of property, denial of a discharge, or worse! It is very important for you to provide ALL the information you are asked. Again, however, I ask how much is too much?
Debtors Turn Over Login Info
Earlier this week, my various news feeds were filled with news of Bankruptcy Trustees in Maryland demanding that Debtors turn over their login information and passwords for various online accounts like E-bay, Amazon Prime and PayPal. This was further reported by Bloomberg on Monday. I think this is quite a bold move on the part of the Trustees who are asking for this information. In fact, Bloomberg reports that the Justice Department that oversees bankruptcy does not support this request. The Trustee even went so far as to hand out a form to Debtors to be filled out with login and password information with a demand that they not close or change their passwords for at least 10 days. A major issue with this, which is pointed out in the article, is that no one knows who will have access to this information. It could cause serious identity breaches for the Debtors required to turn over this information. The general consensus is that this process is far too invasive.
Invasion of Privacy
Normally, a Bankruptcy Trustee may simply ask for statements about a Debtor’s various accounts. The practice of demanding login and password information is definitely not normal. I would compare this invasion to the old days of Debtor’s prisons! If this practice were to become normal course, I believe it would deter some folks from filing and this would be another thing that a reputable Bankruptcy practitioner should counsel debtors ahead of time to simply close out the accounts and follow that with full disclosure of the closed account within the statement of financial affairs that debtors are required to file with the court along with their bankruptcy petition. This would avoid a Trustee having the access to personal information that could pose a risk for a security breach.
The hope is that this will not become a habit of Trustees across the nation. My opinion is that it won’t, but do not let this deter you if you are having financial issues. Go ahead and give us a call for a free consultation to privately discuss what we can do to help you.