Can Facebook and other social media sites ruin your bankruptcy?
Social Media sites, and Facebook in particular, have changed the practice of law. Divorce lawyers regularly review the opposing party’s Facebook profile for evidence of adultery or hidden assets. Prosecutors in criminal cases present online photos to juries as evidence of guilty behavior. Bill collectors troll social media sites looking for assets and debtors.
And don’t think that limiting access to your profile to “friends” only will help. Facebook information can easily be subpoenaed – do not assume any right to privacy for your online materials.
How has Facebook and similar sites impacted the world of consumer bankruptcy? Bankruptcy lawyer Damon Duncan, identifies three situations where careless use of Facebook could have serious bankruptcy implications:
Over the past several years the popularity of social networking sites have grown at an incredible rate. According to Facebook, they have over 500 million active users spending 700 billion (with a “B”) minutes per month on Facebook. Needless to say, it has a huge audience. Could some of that audience be members of the United States Trustee’s office or your creditors? Here are three ways Facebook may ruin your bankruptcy:
1. Personal Property Not Listed
As a part of your bankruptcy you are required to list your personal property. This personal property may then be protected using federal or state exemptions. Any property not listed or not protected may be seized by the Bankruptcy Trustee and distributed to your creditors.
If you have pictures posted from Christmas showing your new four-wheeler or new big screen television, and that personal property is not listed in the bankruptcy petition that was filed in February, then the Trustee may have the ability to seize that property or require you to pay the non-exempt equity in the property.
Or, what if you file in March and you forget to list the new engagement ring that you get on Valentines Day but have pictures showing your new “bling” and changed your Facebook status from “Dating” to “Engaged?” The Trustee could (although unlikely) try to come after that engagement ring or make you pay back the non-exempt equity.
2. Vacations, Trips and Luxury Spending
Another way your social media could damage your chances at a successful bankruptcy filing is if the Trustee or Bankruptcy Court finds out that you have been taking “luxury trips” with your credit cards or other funds. If you post pictures of family trips to the Caribbean or a romantic getaway to Paris, the courts could require you to pay back the expenses incurred on the vacation. When posting pictures to Facebook then this could raise questions in the Trustee’s eyes as to how you have been spending your money.
3. New or Unlisted Jobs
If you have filed a Chapter 13 bankruptcy then you should be making monthly payments to the bankruptcy Trustee. Those payments are largely determined by your income and the amount of disposable income you had at the end of each month at the time of your bankruptcy filing.
If you just received a new job offer and are excited to tell family and friends by posting an announcement on your wall about your new job and the pay raise the comes along with it then this could be information that the Chapter 13 bankruptcy Trustee may be able to use to increase your monthly payments. Again, the more money you make should result in more disposable income. The Trustee can then use that extra disposable income to pay back more of your debts.
What if you have a side business but, in your opinion, you don’t make a substantial amount of income from it so you don’t list it down on your bankruptcy petition? Well, if a Trustee finds out about this other business then this income could be recalculated into your monthly income which may push you above the Means Test forcing you to file a Chapter 13 bankruptcy and pay back at least a portion of what you owe to creditors.
Many people have grown to love social media, especially Facebook. It can be a great way to stay in touch with family and friends. Despite that, it has also opened a window that allows others to peer into your personal life. I doubt many Trustees or creditors are looking up debtors to see if they are telling the truth about their personal assets. However, it can take less than two minutes to find out a lot about a person and their assets by simply looking online. Making your profile private is an easy way to keep people from finding out too much information about you. More importantly, be sure to disclose all of your assets and property to your attorney. If they know about your property then they can almost always protect it, or at least put you in the best situation to keep as much of it as possible.