Bankruptcy and a False Social Security Number
Those using a false social security number are subject to having their filing dismissed and possibly worse.
Bankruptcy is a Privilege for the “honest but unfortunate debtor”.
It is considered an “extraordinary privilege” to discharge debts in bankruptcy. The privilege is intended to be reserved for the “honest but unfortunate debtor.” The courts have uniformly recognized that full and accurate disclosure of all material information is vital to the bankruptcy process.
Bankruptcy and Fraud
However, the use of false social security numbers is widespread in the community. The Social Security Administration receives over 30,000 complaints a year about the misuse of social security numbers. And complaints continue to rise.
The bankruptcy code requires a debtor to cooperate in the bankruptcy process by imposing certain disclosure requirements. The nature and extent of the disclosure obligation must be complete as accurate and full information is essential to the bankruptcy process. Full and accurate disclosure may bar the debtor’s right to discharge and may constitute a crime. In particular, the use of a false social security number corrodes the integrity and fair administration of the bankruptcy process. The Court will deny discharge in bankruptcy to those who intentionally or mistakenly use a false social security number.
The criminal consequence of using a false social security number is reflected in a recent edition of the Bankruptcy Court Decisions Weekly News & Comment reporting on a criminal prosecution for social security number fraud:
Eleanor Ann Ellis, 52, of Venice, N.Y. pleaded guilty to bankruptcy fraud on March 6 before Minneapolis District Court Judge David Doty.
During her guilty plea hearing, Ellis admitted that when she filed for bankruptcy in Minnesota in April 1995, she used a false social security number. She also admitted using a different false social security number in a 1990 bankruptcy petition filed in the State of New York. Her fraudulent use of a social security number in the Minnesota case resulted in the inappropriate discharge of more than $460,000 in debt.
Ellis faces a maximum penalty of five years in prison and/or a $250,000 fine. The joint debtor, even if honest, also faces having their case dismissed.
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