Identity theft can sometimes lead to New York bankruptcy because thieves can take out loans in your name or spend income you need to repay loans. In extreme cases, identity thieves can declare bankruptcy in your name, which can seriously impair your creditworthiness. But just how widespread is identity theft? According to a report issued in December 2013 by the Bureau of Justice (BJS), an arm of the U.S. Department of Justice, losses from identity theft were nearly twice as great as losses from conventional property theft in 2011-2012, $24.7 billion versus $14.0 billion. The bureau gathered its information in a survey of Americans aged 16 and up from January to June 2012 who reported being victims of identity theft in the previous 12 months. The entire report is illuminating, but here are more some of the bureau’s most salient findings.
(1) In 2012, 16.6 million Americans over the age of 16 (7 percent of the total) were victims of identity theft.
(2) Most identity thefts were from existing financial accounts (bank and credit cards). Only 1.1 million people reported misuse of their personal information to open new accounts fraudulently.
(3) Households with incomes in excess of $75,000 were the most likely to be victims of identity theft.
(4) The most common way people discovered identity theft was when their financial institutions contacted them. Most victims didn’t know how the thieves obtained information about them, and unsurprisingly the vast majority did not know the identity of the thief or thieves.
(5) 68 percent of the 16.6 million victims reported direct or indirect financial of at least one dollar. The median loss was $300. By contrast, the median loss from physical property crime was $150 for 15.3 million crimes.
(6) Broken down, identity theft of existing accounts had a median loss of $200, but other types of theft, such as new account fraud and “misuse of personal information” caused median losses of $500 and $1,500, respectively. “Misuse of personal information” is a catch-all term for using a person’s identity fraudulently, for instance, to obtain medical care, jobs, government benefits, housing, and to supply law enforcement with false identification information.
(7) Victims of existing account identity theft were fairly unlikely to run into financial or legal problems, but victims of new account fraud and misuse of personal information were much more likely to have credit-related problems, e.g. being turned down for loans, paying higher interest rates, or repeatedly having to correct problems on credit reports. Victims of new account or misuse of personal information types of identity theft were much more likely to deal with debt collectors than victims of existing account fraud (16.7 percent versus 1.7 percent).
(8) On the good news side: identity theft victims were less likely to suffer emotional trauma than victims of physical property crimes, and the vast majority were able to resolve their credit and financial problems within a month. More than 90 percent didn’t report the theft to the police, mainly because they either handled it on their own or did not know to report the crime or think the police could help.
Link to the full report here (PDF).
The picture of identity theft that the BJS report paints is somewhat better than the accounts you might hear about in the media. Typical identity theft is worse than most property crime, and mainly affects people who have existing accounts with financial institutions. The worst cases are in the minority and involve thieves who either open new accounts or use people’s personal information for fraudulent purposes. These latter situations, like medical identity theft are the most likely to lead to a bankruptcy filing. Regardless of the circumstances, if you are a victim of identity theft and it’s interfering with your ability to meet your financial obligations, it’s worthwhile to discuss your options with an experienced New York bankruptcy lawyer.
For answers to more questions about identity theft, bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced Brooklyn bankruptcy law firm Bruce Weiner for a free initial consultation.
