What Happens If a Parent With Your Same Name Declares Bankruptcy? Experts Say Do This
Written by
Heather Altamirano
Edited by
Angela Corry
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Bankruptcy is on the rise. According to the United States Courts, business and personal filings increased 16.2% compared to the previous year ending June 30, 2024, with bankruptcy filings totaling 486,613. People file bankruptcy for different reasons such as financial hardships and if someone in your family files, it typically should not affect your finances or credit. But what if your parent has the same name as you?
Jay Fleischman, Esq. Managing Attorney, Student Loan Law, Consumer Bankruptcy and Debt Defense at MoneyWise Law breaks down what could happen and what to do about an error.
Mixed Credit File
Mishaps can happen. People with similar Social Security numbers, addresses or common or similar names are at higher risk of having their information combined with someone else’s in a credit bureau’s database. However, when a parent files for bankruptcy, a child with the same name usually isn’t impacted, according to Fleischman.
He explained, “It’s extremely rare for a child to be mixed up in a parent’s bankruptcy because the filer’s Social Security number, rather than their name, is used as the primary means of identification.”
Fleischman continued, “Any confusion would likely be in the incorrect reporting of the parent’s bankruptcy on the child’s credit report, which is called a mixed credit file error.”
A mixed credit file can negatively impact your credit and cause financial damage by increasing interest rates and preventing you from getting loan approvals or housing.
Dispute the Inaccuracy
If a mixed credit file occurs, catching the problem early can help avoid larger credit discrepancies.
Fleischman explained, “If the parent’s bankruptcy shows up on the child’s credit report, dispute the inaccuracy with the credit bureaus.”
Equifax, Experian and TransUnion are the three national agencies to report a dispute to. According to the Consumer Financial Protection Bureau, a dispute must be made in writing and should include the errors to be amended, supporting documentation and a copy of the credit report with the mistake highlighted.
Check Your Credit Reports
One way to help catch potential problems is by monitoring your credit report, which is easy to do with apps like Credit Karma.
Fleischman stated, “The problem is rare, and there’s no surefire way to prevent mistakes from happening. It’s wise to check your credit reports periodically so you can dispute any inaccuracies quickly.”
While a child with the same name as their parent usually isn’t affected by bankruptcy, it can happen. There are experts who specialize in mixed credit files and repairing credit should the situation arise.
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