There are a growing number of social networking sites out there on the world-wide-interwebs that people are latching onto. In fact, both the firm and I have latched onto Facebook (we just lauched our Fan page this week!). So I was intrigued after recently reading that a growing number of domestic relations attorneys were beginning to scour sites like Facebook in an effort to get information on opposing parties. At first, I found it merely interesting as I once practiced domestic relations law. But the subject gnawed on me for several days. Then, earlier this week, I read that collection agencies are trolling sites like Facebook looking for debtors. Then it dawned on me: if collectors are doing it, and divorce attorneys are doing it, there really is nothing stopping any party in any legal case from looking into Facebook or other social networking sites in an effort to gain a legal advantage of any opposing party. And this rings true in the world of bankruptcy.
What is to stop a bankruptcy trustee (or even the United States Trustee) from scouring Facebook or other sites looking for clues into a debtor’s wealth? Perhaps an unscrupulous debtor not only has been spending money with reckless abandon, but they have bragged about it on the net. Trips to Europe. That new car. The really cool TV hooked up with the home theater system with the built in speakers… as in built into the walls. The new siding on the house courtesy of the local home improvement store. All of these events may find their way to the pages of social networking sites, and all are for public consumption.
Status updates may also shed light on a debtor. Sure, saying that “Joe is really looking forward to wearing his new Rolex at the country club” may be totally innocent now, but if Joe heads into bankruptcy a few months from now and the “new Rolex” is no where to be found in any disclosure, Joe can expect a whole bunch of questions…assuming trustees and creditors are paying attention.
Are all trustees going to scour Facebook or other sites looking for clues into a debtor’s financial health? Absent some directive from the Executive Office of the United States Trustees, probably not. But web-savy trustees hunting for assets have been known to look past a debtor’s disclosures and find assets – and there’s really nothing stopping them from looking over a debtor’s statements on Facebook, or anywhere else on the web. And let’s be fair – there’s nothing wrong with them doing so either.
Should bankruptcy attorneys be reviewing all of their client’s social interactions on the web as a part of the bankruptcy case? At this point, I suggest that the answer is ‘no’ provided debtors are properly advised. Indeed, it goes without staying that honest but unfortunate debtors have nothing to worry about. Honest people facing financial difficulties are not going to Disney World a month before filing their case, nor are they stocking up on jewels or hiding cash in mattresses. Honest people don’t brag about the trips they take, or spending time at their vacation home(s) while at the same time lying on bankruptcy filings. Debtors who don’t lie and who need the relief they need have nothing to be concerned about. So reminding clients of the need to be honest, forthright and truthful in all things is really all I need do. And for most debtors, I rarely have to do even that.
But it’s just a matter of time before some debtor pops onto the scene with some perverse sense of entitlement. A debtor who thinks nothing of hoarding their toys and things they feel they should have, while at the same time thumbing their noses at their creditors. A debtor who is proud of their toys and things they should have – so much so it’s all over Facebook, Twitter, Linked In, or scores of other sites that let people express themselves. And it’s just a matter of time before some debtor gets hauled before a bankruptcy judge with a request that a discharge be denied – for no other reason, than because their life on Facebook has proved that they are neither honest, nor unfortunate.
Related posts:
I am torn about this. On one hand I would speculate that once a debtor makes the decision to go into bankruptcy court they feel defeated and ready to disclose all assets. On the other hand Many Many people feel entitled to their stuff even if they can’t afford it, or find a way to justify hiding their stuff because somehow some way its somebody else’s fault they are bankrupt. I don’t know because I have no experience in any of this, just wondering.
On another note I do know about, Facebook and many to follow have the ability to change settings and determine groups so that people only see what they want them to. meaning you can set a group of work and friends where only the friends see personal pics and work group only sees work related posts. It is becoming increasingly harder to see anyone’s profile unless you are prompted to become friends. Although, the vast majority do not know how to protect themselves so it still seems like a viable way to gain very good information.