Bankruptcy and Social Media: Step Away from the Computer!

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Social media has become key evidence in almost all civil and criminal cases. What many people do not know or realize that is if they are a party to a lawsuit, including a bankruptcy case, their Facebook or other accounts will likely be scrutinized by an investigator, attorneys, a trustee or creditor.

A recent article in the Wall Street Journal highlighted this phenomenon regarding people bragging on social media during a bankruptcy proceeding. Although bankruptcy fraud is uncommon, many trustees and creditors do basic research about a person filing bankruptcy to look for undisclosed assets. If a person is posting pictures of themselves in nice cars, on a boat, traveling on luxurious vacations or wearing expensive jewelry, this will likely raise some eyebrows.

A recent and well-publicized case involved rapper 50 Cent, who was in the middle of his bankruptcy case when he posted on Facebook pictures of himself with stacks of cash. The trustee accused him of failing to disclose such cash, which may be considered bankruptcy fraud and an attempt to keep the money from paying back his creditors. 50 Cent was forced to admit the cash was fake, and that he only posted those pictures for publicity.

Of course, the article was quick to point out that many people brag and exaggerate on social media all the time. Just like 50 Cent posting stacks of cash to impress his followers, regular people sometimes post themselves with sports cars, motorcycles or jewelry that was only borrowed or faked for the picture. However, doing this sort of bolstering while in bankruptcy proceedings could catch people’s attention. At best, this court may needlessly extend the court case and at worst, it could result in the trustee accusing the person of fraud.

Bottom line: if you are involved in any court proceeding, including a bankruptcy case, stop posting on social media. Feel free to pass this post along to anyone you might suspect as benefiting from this advice!

Washington D.C. bankruptcy attorney Kevin D. Judd represents clients in bankruptcy court throughout the District and Maryland. He guides people throughout the bankruptcy process and makes sure they stay off social media throughout the case. 

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