When declaring Chapter 7 bankruptcy, many assets can be liquidated to pay off the debt, which means that most of what is owned can be lost. However, for business owners who declare bankruptcy and lose their businesses because of it, should they also worry about losing social media accounts that are connected to the business?
Since social media is relatively so new, there have not been too many cases where this has come up, but one landmark case involved a gun store and set a potential precedent for how future cases will be resolved.
In that case, the gun store owner would use his business sites—like Facebook—to voice his personal opinions. For example, he would write posts regarding the Second Amendment or criticizing the president.
Eventually, the man lost his store when he decided to declare bankruptcy. In addition to the assets that he lost, the judge said that the accounts for Facebook and Twitter were considered part of what the store owned. The judge told the man he had to hand over the passwords.
The man did not want to turn over the passwords, saying that the accounts were not strictly for business, but also personal accounts. He refused to go along with the ruling. As a result, federal authorities eventually arrested him and held him for nearly two months. After that, he agreed to give over his passwords.
This case does a few things, including breaking into relatively new legal territory, so those considering bankruptcy in Pennsylvania need to know how rulings about social media sites can go when those accounts are looked at as business assets. On top of that, experts advise that people consider keeping business and personal accounts separate.
Source: The Blaze, "How Bankruptcy Can Affect Social Media," Kaitlyn Schallhorn, accessed Feb. 19, 2016