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Avoiding Identity Theft—What You Can Do

Identity—it’s more than your name, it’s life as you know it

Someone uses your credit card to charge a Caribbean vacation. Or accesses your bank account and drains it of funds. Or uses your ID while committing a crime. Identity theft refers to a broad range of crimes, including misuse of your financial information, name, Social Security Number and reputation. Unfortunately, it may take months, even years, to repair your financial situation and reestablish your good credit rating.

Steps you should take to avoid identity theft:

  • Check balances and transactions on your checking account and credit card accounts every day. Watch for any unexplained transaction, even as small as a penny.
  • Watch your credit report. You are entitled to a free annual report from each of the major credit reporting companies: Experian, Equifax and TransUnion. Stagger your requests so you get a report every four months. You can call 1-877-322-8228, mail a request to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281, or visit annualcreditreport.com to get started. Avoid copycat websites that try to get you to sign up for “free” reports—and trial memberships that will cost you money.
  • When choosing passwords for online accounts, avoid information that could be researched, such as your mother’s maiden name or the last four digits of your social security number. Use a unique number for each site. One way to do this without losing track of everything is to begin with a sequence of random numbers. For each website, change that pattern in a certain way, such as inserting the first or last character in the URL into the password. Do not keep a written copy of passwords near your computer or in your wallet.
  • If a driver’s license, passport, employee ID, credit card or other agency issued card or document is lost or stolen, immediately notify the organization that issued the document to have it canceled and arrange for a replacement.

Watch for these signs you may be a victim of identity theft:

  • You aren’t receiving bills you normally would receive. This might be a sign your mail has been hijacked and is being sent to another address.
  • Your credit report shows an account you didn’t open.
  • Your checking account or credit card account shows a tiny transaction—this may be a “ping” or test transaction before the thief empties the account.
  • You receive a credit card in the mail—even though you didn’t open an account.
  • You are denied credit or charged a high interest rate when you previously had a good credit rating.
  • You open an email that appeared to be from your financial institution or credit card company, and then realized you were “phished”—tricked into giving personal information such as a Social Security Number.
  • You received a notice that a company you do business with has had a security breach and your data may be involved.
  • You receive a call from a debt collector about a purchase you didn’t make.
  • A company denies your application for credit, insurance or employment and states it is related to your credit report.

If there are errors on your credit report or you are a victim of identity theft or credit card fraud, you will need to track each party involved—debt collectors, credit card companies, banks, credit reporting agencies—to see that the records are corrected. This can be a long, difficult and painful process. You may want to enlist the help of a financial attorney to regain your financial standing as quickly as possible.

Contact an experienced attorney at Bailey & Galyen to discuss your options after identity theft or credit fraud. Contact us at 800-215-9089 to arrange a no-cost, no-obligation consultation.

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Student Loans Are Burying Me. What Can I Do?

Many Americans have borrowed tens or even hundreds of thousands of dollars in student loans, only to find that the education they received has not helped them achieve an income level that allows them to pay their student loans. Many others pay their student loans but are unable to purchase homes, or new cars, or even dinners out, because their student loans are such a burden on their budget.

The numbers clearly show this burden is large and growing. In 2004, 66% of graduates of 4 year universities had student loan debts. The average debt was $19,200, which was a 108% increase from ten years earlier. For those with graduate degrees, the numbers are much higher, ranging from $32,858 for those receiving Master’s degrees, to over $125,000 for medical school graduates. For many people, student loans are a crippling financial burden.

Can bankruptcy help? The short answer is yes and no.

First the bad news, bankruptcy will almost certainly not discharge, or eliminate, student loans. In 1998, Congress changed the bankruptcy laws to make most student loans non-dischargeable, and in 2005 all other student loan were made non-dischargeable. There is an exception to the rule, but almost no one qualifies for the exception. In short, bankruptcy almost never wipes away student loans.

Where bankruptcy can help is to give an individual a break from student loan repayment and harassment from student loan collectors. If a borrower is in default on student loans, and receiving phone calls, threatening letters, being sued, or having their wages garnished for student loans, the automatic stay in a Chapter 13 bankruptcy can stop all of these collection tactics for the duration of the case. This allows the borrower time to “catch their breath” and reorganize their debts, without the burden of student loan collection efforts or wage garnishment.

While not eliminating student loans, a bankruptcy discharge may allow an individual to eliminate other debts, such as credit cards, medical bills, foreclosure or repossession deficiencies or personal loans, so that the individual can dedicate the money from these payments to pay their student loans.

There may be non-bankruptcy alternatives to eliminating student loans as well. Many Federal student loans can be cancelled by the U.S. Department of Education if the borrower dies or becomes totally and permanently disabled. In addition, under some circumstances a student loan may be cancelled if the school the borrower attended closed while the borrower was enrolled or soon thereafter, or if the school improperly certified the student’s ability to benefit from the training provided by the school.

Finally, state and Federal governments have several programs to forgive student loans of individuals in certain fields and professions, such as teaching, social work, medicine, and military service.