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Bankruptcy attorneys object to trustee password request

When Michigan consumers file for Chapter 7 bankruptcy, they are asked to provide information to trustees about finances and various accounts. However, at least two trustees in Maryland have deviated from the usual procedure by making a request for information that bankruptcy attorneys have called intrusive and warn may discourage others from filing for bankruptcy.

The trustees have requested that debtors give their passwords for eBay, Amazon Prime and PayPal accounts. The paperwork further says that debtors must keep these accounts open and are not permitted to change their passwords for 10 days. It is unclear who will have access to this information or what will be done with it, but one bankruptcy attorney says the same information can be obtained with less invasive measures. For example, a trustee can ask to see statements. Furthermore, while bankruptcy attorneys agree that trustees have a right to investigate accounts and ask more questions if it seems necessary, they object to requiring the information at the outset.

One aim with bankruptcy paperwork is to reduce the likelihood that trustees will need to come back and request more information. However, the solution here can be simply requiring debtors to provide any relevant information about these accounts, such as whether they have balances, when filing the initial paperwork.

People who are considering filing for Chapter 7 bankruptcy might be discouraged for other reasons as well. For example, they might think they will lose all their assets. However, in Chapter 7 bankruptcy, some assets are exempt from liquidation. An attorney can provide information about the process and the eligibility and other requirements.