What Happens to Your Online Accounts & Data in Bankruptcy?

How Bankruptcy Can Impact Your Digital Assets, Online Business & Privacy

Online accounts, digital assets, and social media are all ingrained in most individual’s daily lives. Whether you have cryptocurrency, a successful social media platform that generates income, or an online store, all of your digital assets could be affected by your bankruptcy.

Not only that, but bankruptcy initiates a release of personal information on PACER (Public Access to Court Electronic Records). With so much of your personal information digitally accessible, you become more susceptible to scams and fraud.

However, there is a way to protect some of your assets and prevent so much personal information from going public. If you’re considering bankruptcy, consult with a bankruptcy lawyer first to make sure you do what is necessary to protect yourself and your digital assets.

Which Digital Assets Can Be Seized or Liquidated During Bankruptcy?

When you file for bankruptcy, you will be appointed a trustee who will oversee your case. This trustee will look at your physical and digital assets and determine which can be used to pay off your debts. You will not be given a choice as to which assets are liquidated and which are kept and you are legally required to disclose everything you own to your trustee.

Your assets will be treated differently depending on what they are. Here is a breakdown for each type of asset:

Cryptocurrency

Online currency such as bitcoin or Ethereum will be seen as a digital asset and you are required to disclose them. Cryptocurrency changes in its value regularly. The trustee will determine its value based on when you filed for bankruptcy. You will be required to give the trustee access to it, however you store it. Your trustee will determine if it is worth liquidating to repay your creditors.

Online Business & E-Stores

Online stores are considered assets and will be either sold or liquidated depending on the value. This will include your website, customer lists, inventory, and domain name. The business’ income will be evaluated as well. There are ways to protect your online business. Contact a bankruptcy lawyer to find out how.

Social Media Accounts & Digital Content

While your personal digital social media accounts are typically not generating revenue and are considered private, there are some situations that could be seen and used as an asset. If you have an account with a significant following or are gaining income from ads or sponsored posts, this could be seen as an asset. Your trustee will determine whether or not this asset should be used.

Cloud Storage & Digital Files

Like your social media, cloud storage and digital files are generally considered private and will not be used. However, exceptions to this would be if the file has significant financial value, if you have sensitive business documents on your personal cloud storage, or if there is any other type of valuable data stored on the cloud or digitally.

Tips For Protecting Digital Assets During Bankruptcy

Protecting your digital assets is possible, but takes careful planning and benefits from the help of a bankruptcy lawyer. To make sure your digital assets are as protected as possible, you should consider the following:

• Make sure all your assets are disclosed to the trustee. Transparency is crucial in avoiding legal issues.
• Keep your personal accounts and business accounts separate. Do so with both your finances as well as cloud storage and digital content.
• Backup all of your important data to an external hard drive. This ensures you always have access, even if the trustee is reviewing your accounts.
• Look into possible exemptions that could protect some of your digital assets. For example, “tools of your trade” might be exempt such as software for your online business.
• Reach out to a bankruptcy attorney to help you protect as much of your digital data as possible. Bankruptcy attorneys understand all the details and nuances of bankruptcy law and can help you utilize every exemption available.

The Impact Of Bankruptcy On Your Digital Privacy & Identity Protection

When you file for bankruptcy, your life often becomes public in ways that can significantly affect your privacy. All of your detailed financial and personal information that is connected to your case will become accessible to the public through Public Access to Court Electronic Records or PACER.

Having your financial and personal information available to access means that you are at a much higher risk for identity theft, you will be flagged by employment screening, and marketing companies will target you. These records on PACER are routinely checked by creditors, employers, landlords, and data aggregators which could cause difficulties for your future.

The Types Of Data That Will No Longer Be Private After Bankruptcy

What data will no longer be private once you file for bankruptcy? It depends, but in general you will be required to provide a comprehensive list of personal details that will be visible to the public. The list includes:

• A partially redacted social security number
• Current and previous addresses
• Employment history
• Income details
• Family member information
• Tax returns
• Pay stubs
• Bank account details
• Vehicle identification numbers
• Property descriptions

Ways To Safeguard Your Privacy When Filing For Bankruptcy

The personal details that you are required to share and will become public is extensive and could easily be used to create a full identity profile. So how can you protect your privacy when you file for bankruptcy? A bankruptcy attorney can help you, but in general you can follow a few steps.

First, before filing for bankruptcy, you should redact as much unnecessary personal and sensitive information as possible from any documents. Consider using a P.O. box instead of your home address if you can. Second, consult with a lawyer about timing to make sure you minimize any public attention. Third, make sure you have strong passwords setup on your accounts and actively monitor your credit reports for fraud.

Set Up Measures To Protect Your Rights & Secure Your Privacy by Contacting Our Trusted Bankruptcy Lawyers

Filing for bankruptcy is a big decision that can significantly affect your life. However, bankruptcy can also put you on the path towards financial freedom. Make sure your privacy and digital assets are protected by hiring our Honolulu bankruptcy attorneys at Blake Goodman. We bring compassion and expertise to the table and are dedicated to our clients every step of the way.

Reach out to our law firm for a consultation to get started.