Victims of Identity Theft May Need to File Bankruptcy to Recover

Identity theft is a pervasive problem in the United States. In 2021, nearly 24 million people in the United States had been a victim of identity theft in the previous 12 months Approximately 22% of Americans had been a victim of identity theft at some point in their life.

When this happens, you may be worried about your finances, your security, and your life in general. Who got a hold of your credit card or bank account? What will happen to your credit score?

If the identity thief acts quickly, they can cause a lot of damage to your finances and credit. It may take you a long time to clean up the mess. You may even be considering bankruptcy.

Bankruptcy can help you make a fresh start by discharging most types of debts. It can also allow you to resume control of your financial situation. While some victims of identity theft may need to resort to bankruptcy to get their finances back on track, it should not be your first option. When you first notice something wrong with your credit, there are other steps you need to take first, such as the following.

Contact Financial Institutions

Notify your bank and credit card companies immediately about fraudulent transactions or accounts. Request account closures or replacements for compromised cards. Dispute any unauthorized charges. You typically have 60 days to challenge fraudulent transactions under federal law, so don’t delay.

Freeze or Monitor Credit

Place a fraud alert with the three major credit bureaus (Equifax, Experian, and TransUnion). This makes it harder for thieves to open accounts in your name. Consider a credit freeze, which prevents anyone (including you) from opening new credit accounts unless you temporarily lift the freeze.

Change Passwords

Update passwords for financial accounts, email, and any service that stores your personal information. Use strong, unique passwords for each account; consider a password manager for secure storage.

Monitor Statements and Credit Reports

Regularly review bank and credit card statements for unauthorized charges. You can get free credit reports from AnnualCreditReport.com. Dispute any accounts or inquiries you do not recognize.

File a Police Report

Filing a police report can help if a fraudulent account was opened in your name, a creditor requires proof of identity theft, or you know who committed the theft (e.g., an acquaintance or family member). When filing a report, have your fraudulent account statements and letters from creditors on hand.

Contact Us Today

Identity theft can do a lot of damage to your finances and credit. You could end up in major debt and have to start over.

Bankruptcy can help you get a fresh start after identity theft. Contact South Florida bankruptcy attorney Brian K. McMahon, P.A. We will help you understand your options and guide you through the process. To schedule a consultation today, fill out the online form or call (561) 658-1789. We serve the West Palm Beach, Boca Raton, Port St. Lucie, and South Florida areas.