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Creditor Reveals Debtors' Personal Information in a Proof of Claim

Posted By admin || 2-Sep-2009

Proof of Claim Reveals Debtors' Personal Information

In the bankruptcy case of Killian, William E. and Rose Mary; In re (Killian v. Green Tree Servicing LLC) the bankruptcy court dismissed two debtors claim that they were harmed by a creditor when the their personal information was included in a proof of claim.

The details of the bankruptcy case:

"The debtors alleged that Green Tree Servic­ing violated state and federal law by including their per­sonal information in a proof of claim and motion for stay relief filed with the bankruptcy court. The court dismissed the debtors' cause of action under the state' unfair trade practices act because the filing of bankruptcy court documents was subject to the law. The court also dismissed the debtors' cause of action based on negligence because they did not allege any harm. The complaint simply said that the inclusion of the information exposed the debtors to an increased risk of identity theft."

The debtors' subsequently signed up for a $25 a month service to monitor their credit report as a preventive measure.  The bankruptcy court also noted that since the debtors did not allege any specific damages they had suffered and since the creditor eventually removed the offending disclosure, the debtors' complaint had no grounds.  However, the bankruptcy court did agree to review the creditor's conduct to determine if further action should be taken against them.

The protection of privacy is one of the most important concerns for debtors and not just in bankruptcy cases.  Sometimes creditors are "careless" in disclosing private information about debtors when trying to collect a debt.  For example, there have been some notorious cases involving creditors revealing private information about a debtor's financial situation to neighbors and relatives.  This is illegal.  The creditor does not have a right to disclose a debtor's private information to any unauthorized person.  Nor do they have the right to threaten you with disclosure of your private information. If this happens to you, contact an attorney immediately. You may be entitled to remedies under the law.

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