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New York Bankruptcy Trustees Can Use Internet Social Media against Petitioners

It’s safe to say that everyone is impressed by how much technology has progressed in the last decade. In the previous century, people used film cameras and could only distribute the pictures by paying a company to make more prints and send them to friends and family. People still do that, just much less frequently.

Now, we have digital cameras and Internet media sites that allow us to post those pictures for all to see. Aside from creating a discussion on how privacy should work in the future, Web sites and services such as Facebook, Twitter, Google+, and others are rapidly creating new legal issues for users that didn’t exist before. Facebook in particular is cited for contributing to job dismissals, divorces, and evidence in civil and criminal proceedings. Recently, Facebook facilitated the process by granting users the ability to download all their account data via the “Account Settings” menu.

Features such as these make it significantly easier for those adverse to your legal interests to gain an advantage over you in legal proceedings. New York consumer bankruptcy is no exception. The Trustee, whom the bankruptcy court charges with gathering your nonexempt assets into the bankruptcy estates and distribute them to your creditors, can use your social media information to do just that. The Trustee is motivated by the fact that he or she is paid on commission from the proceeds of the bankruptcy estate. Here are a few things Trustees can do.

(1)  Seek hidden personal property. Sometimes people filing bankruptcy fail to disclose assets on their petitions. Sometimes it’s intentional, sometimes deliberate. One thing the Trustees can do is look on Facebook for evidence of hidden assets, such as pictures of expensive merchandise. If discovered, petitioners will have to either pay the Trustee for the property or surrender it for sale to give to creditors.
(2)  Find evidence of spending on expensive intangibles. If someone posts pictures of a recent expensive vacation and doesn’t disclose it to the court. The Trustee will want to know where the money came from and when. If it was a gift, then it’s income that can affect which chapter a person can file in. It it’s unlisted, the petitioner may not receive a discharge.
(3)  Disclosures of new income. Sometimes people will brag on Twitter that they won the lottery or a prize yet fail to list it on the petition. More commonly, they’ll post news of finding a new job without telling the court that it’s a new source of income. The latter in particular can affect a Chapter 13 payment plan.

The general lesson here is to be honest on your petition to avoid the social media problem. An experienced New York bankruptcy attorney can help you with that.

For more questions about bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced bankruptcy trustee actions Bruce Weiner for a free initial consultation.

Rosenberg, Musso & Weiner, L.L.P
26 Court St # 2211
Brooklyn, NY 11242, USA

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