Does It Make Sense To File Bankruptcy Because Of Identity Theft?

Does It Make Sense To File Bankruptcy Because Of Identity Theft?

You are the victim of Identity Theft and now you have multiple accounts and debts that are not yours.  Friends and family tell you to file bankruptcy.  Should you?

Let’s think this through.

Filing bankruptcy can get rid of the bogus debts if you qualify for Chapter 7.

But bankruptcy is for debts that you owe.

You don’t owe ID theft debts.

So why would you file bankruptcy — with all the damage to your credit and life that goes with filing a bankruptcy — just to get rid of debts that you don’t owe?

Here’s the deal.  If you have bogus accounts — especially ID theft accounts — dispute the bogus accounts with the credit reporting agencies.  

Send copies of the letters to the creditors.

Make sure and include a police report and ID theft affidavit.

Either the accounts/debts will go away or they won’t.

If the bogus debts stay on your reports, then sue the credit reporting agencies and the creditors (“furnishers”) for keeping false accounts on your report.

If anyone has to be hurt by ID Theft, it should be the companies that allowed the theft in the first place and who refused to fix your credit reports when you bring it to their attention.

You should not hurt yourself by filing an unnecessary bankruptcy.  One of the reasons to pass the Fair Debt Collection Practices Act (FDCPA) was to prevent unnecessary bankruptcies.

Contact Us.

We hope this article has been helpful to you.

If you live in Alabama and you have any questions, give us a call at 1-206-879-2447.

Or fill out a contact form and we will get in touch with you as soon as possible.

I look forward to chatting with you.

Have a great day!

-John G. Watts


  1. credit repair says:

    A common misconception is that a legitimate bankruptcy can be removed from a credit report before the time allowed by law, which is usually 7 or 10 years depending the chapter. There are numerous so-called credit repair companies advertising that they can get bankruptcies and other negative credit items removed from a credit report for a fee. However, according to the Federal Trade Commission (FTC), it is not possible to remove accurate negative information from a credit report. Nevertheless, there are ways to reduce the duration that a filing is reported. There are also options to remove a bankruptcy filing if an error is involved or if the debtor was the victim of identity theft.

    • John Watts says:

      You are correct — if the bankruptcy (or other negative credit reporting) is accurate, then it stays for the time allowed by law.

      But if it is incorrect, then it can be removed. It might contain the wrong balance or have false information about when we were late, etc.

      A bankruptcy could have the wrong date or case number, etc. and that would make it false.

      Identity theft is a huge problem, especially with the reckless people at Equifax exposing our data to hackers. You can certainly challenge identity theft accounts to get those removed.

      Thanks for your comment.

      John Watts

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