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BANKRUPTCY & IDENTITY THEFT

Bankruptcy
Identity theft
Tips to keep you from identity theft
If your identity has been stolen

Bankruptcy

Bankruptcy is a way to eliminate debts or repay them under court protection and supervision. Child support payments, alimony, fines, taxes and student loan obligations are typically not eliminated. Brakruptcy was created to give a hopeless debtor a fresh start and should always be considered a last resort. A bankruptcy will stay on your credit report for up to 10 years, possibly affecting your ability to buy or rent a home and will likely result in higher interest rates on future loans. It is difficult to get student loans discharged through bankruptcy.

Types of Bankruptcy

There are many different types of bankruptcy, but the most common are Chapter 7 and Chapter 13. In a Chapter 7 or "straight bankruptcy" you agree to turn over all of your non-exempt assets to a Chapter 7 trustee. The trustee then sells your assets and distributes the money to your creditors.

Chapter 13 or "reorganization" allows you to keep your property, such as a mortgaged house or car. It includes a plan based on disposable income to pay creditors over 3-5 years with a single monthly payment.

Reference: http://www.practicalmoneyskills.com/personalfinance/creditdebt/debt/outofdebt.php

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Identity Theft

Identity theft is when someone uses your personal information, like your name, Social Security number, or your credit card number, to commit fraud. Identity thieves may use your information to pen a new credit card account in your name and then, when they don't pay the bills, the delinquent account is reported on your credit report. Inaccurate information like this could affect your ability to get credit, insurance or even a job. Source: Federal Trade Commission, http://www.consumer.ftc.gov/articles/0155-free-credit-reports

In Texas, the highest percentage of identity theft complaints come from victims between the ages of 18 and 20 at 34%. Source: Identity Theft Counseling http://www.identitytheftcounseling.org/Statistics.htm#Age

Common forms of identity theft are: financial, child identity theft, governmental, medical and even social network identity theft. Source: Identity Theft Resource Center http://www.idtheftcenter.org/?source=googleSS&gclid=CI-b6eOBjrYCFW2nPAodcG0AWw

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Tips to keep your personal information secure

  • Check your credit report regularly for suspicious or fraudulent activity
  • Do not give anyone personal information over the phone or email unless you initiated the transaction
  • Make sure financial documents are locked in a secure place at both work and home
  • Do not carry your Social Security card in your wallet or purse
  • Limit what you carry with you
    • For example, bring copies of medical insurance cards unless the original is required
  • Do not leave personal belongings unattended in a vehicle or public area
  • Shred documents that have personal information
    • Credit card/bank statements
    • Medical bills
    • Insurance forms
    • Checks
  • Do not throw away sensitive information in the trash: use a shredder
  • Keep information secure online
    • Be cautious of emails from senders you are unfamiliar with
    • Do not respond to phishing emails requesting personal information
    • If you are disposing of a computer, make sure to wipe out the entire hard drive
    • Have strong passwords that would not be obvious for someone to figure out
    • Never share passwords
    • If you must write down passwords, keep them in a secure location
    • Use anti-virus software, encrypt your data and lock your laptop

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If you think you're a victim of identity theft

The following are some clues that someone may have stolen your information:

  • Withdrawals from your bank account that you can't explain
  • You haven't received your bills in the mail
  • Call from debt collectors about debts that aren't yours (checking credit reports can help you discover suspicious activity quicker)
  • Unfamiliar accounts

Source: Federal Trade Commission: http://www.consumer.ftc.gov/articles/0271-signs-identity-theft

If you think you have been the victim of identity theft, report and cancel any lost or stolen cards immediately, place an initial fraud alert, order your credit report and create an identity theft report. In more extensive cases, you can have a credit freeze. Please visit http://www.consumer.ftc.gov/articles/0277-create-identity-theft-report for more information.

To repair damage done by an identity theft, you can dispute the errors with the credit reporting companies and to the fraud department of each business that reported an error. If the error is a result of identity theft and there is an identity theft report on file, the disputed information can be blocked from appearing on your credit report. Source: Federal Trade Commission http://consumer.ftc.gov/articles/0290-repairing-your-credit-after-identity-theft

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