Think before you post—social media can derail your bankruptcy

In the age of social media, it is especially important to be truthful on your bankruptcy application.

Nowadays, people share many things about themselves on social media without a second thought. Everything from a negative customer service experience to a cute pet trick can routinely be found on Facebook pages and Twitter feeds. Although social media has allowed people from around the world to connect with each other on unprecedented levels, it also gives many people access to personal information. If you have filed bankruptcy, the information found on your social media accounts can be used against you.

How social media can hurt you

When you seek bankruptcy protection, you need to provide information on your petition that allows the court to better ascertain your financial situation. You must truthfully list all of your income, assets and debts. If the information that you provide is incorrect or incomplete, you can face the dismissal of your bankruptcy case, even if you made an honest mistake. In the worst of cases, if the court believes that you intended to lie, you can be charged with perjury, which can involve heavy fines and jail time.

In the age of social media, your creditors and bankruptcy trustees routinely check filers' accounts to discover evidence of falsehoods on the bankruptcy petition. For example, a trustee may comb through the photos that you posted on Facebook, looking for electronics, cars, jewelry and other assets that were not disclosed on your petition. Likewise, a trustee may check your postings for evidence of income from another means (e.g. a second job). As a result, it is especially important to be forthcoming on your bankruptcy petition.

Failing to be truthful on your petition can seriously impair your ability to obtain bankruptcy relief. If you file Chapter 7 bankruptcy (or any other type), the purchases that you make within three months of filing the petition come under especially heavy scrutiny. Although credit card debt is typically dischargeable, an important exception to this rule is luxury goods and services purchased within 90 days of the filing. If a creditor or trustee finds photos or feeds of you enjoying a vacation, expensive dinners or shopping sprees during this time, it will certainly be brought to the court's attention. This may result in a denial of discharge for some or all of your debt, meaning that you will have to pay it back.

Not being truthful about your income can especially hurt your Chapter 13 case. In this type of bankruptcy, you pay back some or all of your debt over time according to a payment plan. The amount that you must pay is based on your income. As a result, it is important to keep the bankruptcy trustee apprised of any income changes during the repayment period. If the trustee finds that you have tweeted about a raise or mentioned a second job but not informed him or her, you may face serious consequences including the denial of a discharge.

An attorney can help

In order to ensure a smooth bankruptcy process, it is vital that you be aware of what you are posting online (and how it may be perceived by others) and be completely truthful when preparing your petition. An experienced bankruptcy attorney can ensure that your petition is complete and accurate and can work to secure the debt relief that you are seeking.

Keywords: bankruptcy, social media