Power of Attorney and Bankruptcy
Power of Attorney is a powerful and critical part of your estate plan. It allows someone to act on your behalf should you become incapacitated. Whomever you appoint as your "agent" or "attorney in fact" can make decisions for you or manage your finances. A standard Power of Attorney agreement does not allow the agent to sign a bankruptcy petition on someone else's behalf.
Your Power of Attorney agreement must be bankruptcy specific to enable someone to file for bankruptcy on your behalf. This can be an important aspect of managing one's finances. This document must provide for the signer to "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."
This will allow the concerned family member (agent) to deal with the elderly or infirmed's debt problems through the tool of bankruptcy, without the debtor having to be present. The bankruptcy specific Power of Attorney agreement cannot be executed at the time of a bankruptcy filing. If the family member is unable to sign a bankruptcy petition, they are also unable to sign a bankruptcy specific power of attorney.
Power of Attorney and bankruptcy is a reminder of the importance of regularly reviewing your estate plan. They are both important tools, make sure they are fully available to you. Review or create your estate plan and its components with Shoffner & Associates, counselors to small business and families.
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