USTP Press Release
For Immediate
Release
January
29, 2001
PERSONAL
BANKRUPTCY FILERS
MUST
SHOW PROOF OF IDENTIFICATION
WASHINGTON,
D.C.-Debtors who file a personal bankruptcy case after Jan.
1, 2001, in 19 federal judicial districts must show proof
of identification and Social Security number under a pilot
program now in effect, Martha Davis, Acting Director of the
Executive Office for U.S. Trustees, announced today.
The
Debtor Identification Pilot Program was launched Jan. 1, 2001,
to detect and deter identity fraud in bankruptcy, which typically
involves filing for bankruptcy using a false name and/or Social
Security number.
"Identity
fraud can severely damage the credit record of an innocent
victim whose name and Social Security number are falsely used
in a bankruptcy filing," Davis stated. "Identity fraud also
threatens the integrity of bankruptcy court records by placing
inaccurate information in those records."
The
EOUST is the Washington, D.C., office of the U.S. Trustee
Program, a component of the Justice Department that monitors
the administration of bankruptcy cases nationwide and works
to ensure the integrity of the bankruptcy system.
Pilot Program
Requirements
Under
the pilot program, bankruptcy debtors who file under Chapter
7 or Chapter 13 must provide proof of identity and Social
Security number when they appear at the mandatory "Section
341" meeting of creditors to discuss their financial obligations.
The Section 341 meeting is held 20 to 40 days after the case
is filed.
Permissible
forms of identification include a valid state driver's license,
government-issued picture identification card, U.S. passport,
or legal resident alien card. Proof of SSN may be provided
through documents such as a driver's license, Social Security
card, current W-2 Form, or payroll check stub. Other forms
of identification and proof of SSN may be accepted as well.
During
the pilot program, the U.S. Trustees will collect data on
topics such as the use of questionable identity documents,
inaccurate names, inaccurate SSNs resulting from mistakes
such as typographical errors, and inaccurate SSNs resulting
from apparent fraud.
The
pilot program is modeled after a procedure tested since September
1999 by the U.S. Trustee in Northern Illinois and Wisconsin
(Region 11). As a result of that test, attorneys who represent
bankruptcy debtors in Region 11 now routinely ask their clients
for proof of identification and SSN, and advise their clients
to be prepared to provide proof of identification and SSN
at the Section 341 meeting. The test uncovered cases of apparent
criminal fraud as well as typographical errors resulting in
inaccurate SSNs on bankruptcy documents.
Background:
Why File Under a False Name or SSN?
A
common reason for filing a bankruptcy case under a false name
or SSN is to obtain the protection of the "automatic stay"
to delay foreclosure or eviction, without placing a bankruptcy
on one's own record. (A false filer with a prior bankruptcy
may be currently ineligible to refile, under the laws that
govern how soon one may refile.)
The
automatic stay takes effect as soon as a bankruptcy petition
is filed. Until it is lifted by court order or otherwise expires,
the stay prevents creditors from engaging in collection actions.
A false filer who seeks only the temporary protection of the
stay often fails to appear at the Section 341 meeting, and
the case is dismissed. However, the bankruptcy filing remains
in the court record under the victim's name, and remains on
the victim's credit record.
Another
common reason to file for bankruptcy under a false name or
SSN is to evade payment of, and to discharge, debts incurred
under the false name or SSN. The filer may have fraudulently
obtained credit cards, telephone service, bank loans, or other
valuable goods or services.
In
other cases, the use of a false name or SSN on a bankruptcy
petition results from careless error. An attorney, paralegal,
or bankruptcy petition preparer may accidentally transpose
digits in the SSN while filling out the client's bankruptcy
papers. If the inaccurate SSN matches the true SSN of another
person, the bankruptcy filing may appear on that person's
credit record.
Contact: Jane
Limprecht, Chief of Communications and Consumer Affairs
Executive
Office for United States Trustees
(202)
305-7411
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