If you have ever had to deal with having your credit card information stolen or been a victim of identity theft you know how difficult it can be to undo the damage. Proving that you didn’t do something is very difficult. The creditor and even the courts often have the attitude that your claiming identity theft is merely a way to try and get out of paying a debt. This also sheds a light into what I see as an anti-consumer bias, but I will save that rant for a later day.
Sometimes, despite your best efforts, you are unable to remove that fraudulent charge that is showing up on your credit. I have had clients end up with $100,000 judgment against them for debts they didn’t incur. So what happens then? Once a judgment is entered it is very difficult to remove. Even when clients have proper documentation showing that they have taken the necessary steps to report the identity theft courts have ignored it and allowed a judgment to stand.
My first bit of advice if you are dealing with identity theft is to get on top of things early. If you suspect – or know – that your identity has been stolen take action now. Report it to the credit bureaus, contact your local police department and fill out a report, and reach out to the creditor that holds the fraudulent debt. Document all of these efforts, because if push comes to shove and you have to prove that you don’t owe this debt in court the steps that you take early in the process will go a long way in securing a positive outcome.
But what happens if you are well beyond that? If you find an old judgment or line on your credit report that you didn’t incur but now they are calling you trying to collect or worse are garnishing your wages? Bankruptcy can deal with all debt – even the ones you didn’t incur. It is a drastic and frustrating step to have to take, but at some point you will have exhausted all of your options and bankruptcy will be the only thing you have left. Again, you can avoid this by acting early and documenting your efforts to show the theft of your identity, but if necessary bankruptcy is a solution that will eliminate this headache once and for all.