Bankruptcy Checklist: Social Security Numbers

Do you check the client’s  proffered   Social Security number against the number on their tax return?  I’d never thought to do so til my partner returned from a 341 meeting with this story.  She was sitting waiting for our client’s turn at a first meeting of creditors  when the trustee asked a debtor about the fact that the Social Security number on the petition didn’t match the number on the paystubs provided to the trustee.  “Oh,” says the debtor gesturing to the paystubs, “that’s the Social Security number I work under”!

I would never have considered that a debtor would use two different Social Security numbers without a thought.  Yet they apparently do.  With this  experience,  I have added the need to check the Social Security number against the tax return to my list of pre filing checks.

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  • What a shocker!! Thanks for sharing. Who would have thought.

  • Gus

    That means you would never take an illegal alien as a client?

    • No, it means that I won’t file a case where the client can’t tell the same story twice. Nothing about this story involved whether either of the SS numbers actually belonged to the debtor. For me, the issue is finding out in advance that the client has some sort of thoughtful tax irregularity going.

  • Gus

    Cathy: Now that we’re on it… can you address the illegal alien issue? They usually use a fake social security number and a PIN number for tax purposes. Is that going to be construed as a “fraudulent act”? Can a debtor get a discharge while using a fake ss# to work?

    • Cathy Moran

      I think it’s fraudulent, but perhaps not a fraud in the bankruptcy case. There are cases and UST’s going both ways. You don’t need to have a Social Security number to file bankruptcy. You don’t need to be a legal resident to file bankruptcy. But you may have committed crimes if you use a false number. It’s a real dilemma.

  • Cathy: I guess 20+ years of tax preparation and defense has trained me to verify. Further if I have a suspicion, I will under the POA i get from every client (BK or otherwise) check SSN against SS databases.

    • Cathy Moran

      So will I going forward

  • I asked my client why he had a different SSN on this bankruptcy compared to the bankruptcy he did 10 years ago. He said to go ahead and use the new number because he knew it was valid because he paid $200 for it. He didn’t believe me when I told him SSNs are free in this country.

  • Mark Raia

    If a person doesn’t have a social security number, what would you use instead for filing a bankruptcy?

  • Cathy Moran, Esq.

    I’d first want to know whether they have income or an obligation to file income taxes, and if so, how are they doing so.

    There is no requirement that you have a Social Security number to file bankruptcy. If you have one, you must disclose it.

    A taxpayer ID number can be obtained from IRS if one isn’t eligible for a SSN and needs to file taxes or otherwise identify themselves.

    But often, there is a bigger story you need to understand.