It’s not uncommon for us to have consultations with family members who are concerned about a parent or sibling’s debt problems. Sometimes the parent or sibling is present for the consultation, sometimes they aren’t. What can cause difficulty sometimes is when the non-debtor family member produces a Power of Attorney and asks us to file a bankruptcy case for the elderly or infirmed debtor without the debtor being present. Though such a scenario is conceivable, it’s rare. And there are a number of reasons for that.

1) A standard Power of Attorney agreement is insufficient to sign a bankruptcy petition on behalf of someone else.

The Power of Attorney document must explicitly provide for the signer to do the following:

“prepare, to execute and to file all required papers and instruments which are necessary for an effective filing under the United States Bankruptcy Code, and the pertinent state law, and in that regard:  (1) to complete any credit counseling and/or financial management course requirements on my behalf, (2) to appear on my behalf at Court and the First Meeting for creditors, and (3) to do all acts and to prepare and sign all documents necessary for the filing, handling and completion thereof, including without limitation: (a) Signing the Petition, Schedules, and other documents necessary to effect the filing, (b) Submission of an application for Court approval to use Interrogatories in place of a personal appearance at the First Meeting of Creditors, (c) Signing of the Interrogatories, (d) Personal appearance at the First Meeting of Creditors, (e) Signing of affidavits and any and all other documents necessary for or related to motions, applications, and other submissions to the Court or the Bankruptcy Trustee.”

2) If a “bankruptcy specific” Power of Attorney agreement has not already been executed, it is too late to execute one concurrent with the bankruptcy.

Why? Well, if a family member is too infirmed or incompetent to sign a bankruptcy petition, then they are, necessarily, too infirmed or incompetent to sign a bankruptcy specific power of attorney.

In a situation where a debtor is mentally competent, but is physically unable to come to our office or attend a hearing, we can represent the individual by speaking to them on the phone and mailing the necessary documents to the debtor. The concerned family member may be very involved in that process, but, in the end, it is the debtor’s signatures that are on the bankruptcy pleadings.

In a situation where a debtor is mentally incompetent to sign a bankruptcy petition and no bankruptcy specific power of attorney exists, the non-debtor family member should seek to be appointed guardian of the debtor family member through the court system in their county.