No longer limited to unruly teens, Facebook is all too often the silent detective leading to unhappy bosses and significant others.
Eeeek. Calling your boss a pervvy wanker is probably not the smartest idea, unless you are looking for a ticket to the unemployment line. However, would a similar Facebook faux pas impact the case of a debtor filing for bankruptcy protection in Arizona?
Personally, I have never seen it. I am a pretty darn experienced bankruptcy lawyer, and yet I have never seen a bankruptcy trustee use social media in a case against a debtor. That being said, I think it is coming….and soon.
Georgia bankruptcy lawyer Jonathan Ginsberg recently blogged on this very topic, and I think his analysis was spot on. Specifically, he touched upon three different ways in which a debtor’s Facebook or twitter posts could negatively impact their bankruptcy case.
1.) Personal Property Not Listed: I wasn’t born yesterday. In fact, I am pretty savvy at recognizing when debtors are trying to pull the wool over my eyes with regards to declaring all assets to the bankruptcy courts. Unfortunately, the bankruptcy trustees are pretty darn good at it too. I wouldn’t be surprised if Facebook photos of Rolex watches and Prada shoes started showing up at 341 hearings.
2.) Vacations and Luxury Spending: It is true that the bankruptcy code affords debtors the minimal assets determined necessary to start over. Nobody wants to leave a debtor destitute, unable to rebuild their finances post-filing. However, the bankruptcy code does not allow for frivolous or luxurious spending in preference to debt repayment. Therefore, expect to hear from your bankruptcy trustee if evidence of frivolous spending arises….such as photos from your recent European vacation, for example.
3.) Change in Employment: A successful bankruptcy petition is based upon accurate representation of employment. Remember that chapter 7 bankruptcy debtors must qualify via income restrictions and chapter 13 debtors must pay a monthly payment based on their disposable income. If your income changes dramatically, this may effect your bankruptcy case. Therefore, I imagine that your bankruptcy trustee may be interested in these details.
What can you do? The first step is to set your profile to private…..like, yesterday. More importantly, however, is to ensure that you provide accurate and complete information to your bankruptcy trustee. That is, unless you look especially good in stripes (black and white stripes, that is).