When people in California file for Chapter 7 bankruptcy, a trustee is assigned to oversee the case. Neither the Justice Department branch in charge of overseeing bankruptcies nor bankruptcy attorneys support the efforts of two trustees in Maryland to collect debtors' passwords for Amazon Prime, eBay and PayPal. The paperwork also says that the debtors will keep the same passwords for a minimum of 10 days and will not close the accounts.
The request for information is seen as invasive by attorneys. Trustees are permitted to examine a debtors' assets and determine whether any can be recovered for the bankruptcy estate. However, asking for passwords is considered an overreach and one that could discourage others from filing for bankruptcy. The issue is not with the request for information but the fact that trustees have made it routine. Ordinarily, a trustee would have the right to pursue inquiries into these types of accounts only if there is a reason to do so. However, there are still other ways of doing so that are less invasive, such as getting statements.
One bankruptcy attorney says that the request treats debtors like criminals. Furthermore, it raises online security issues. A better remedy would be including information about these online accounts, such as cash balances, in filing the initial bankruptcy paperwork.
Bankruptcy is one solution for debt relief, and an attorney may be able to help a person determine whether this is the best solution in any particular situation. With a Chapter 13 bankruptcy, a person may be able to create a payment plan and keep some assets, including a home. The idea that a person loses all assets in a bankruptcy is one of a number of myths about the process. Another is that it will ruin a credit score, but it is possible to rebuild that score after filing.