Bankruptcy filings in the U.S have been on the rise since the recent economic depression. Data from the Federal Reserve discloses that 1,593,081 non business bankruptcy cases were filed in the fiscal year 2010. That is a pretty scary figure.
May be you are contemplating bankruptcy owing to an acute financial crisis. What if you are not in a position to file bankruptcy yourself? Have you ever wondered what can happen if you are severely ill or out of station due to some urgent work or unable to complete the paperwork yourself due to some unavoidable reason? In that case, it is possible for someone close to you to use a power of attorney and file bankruptcy on your behalf. However, a few things are to be kept in mind while opting for the above option. Power of attorney documents are usually drafted keeping in mind the requirements of insurance, banking and real estate sectors. This is because Power of Attorney is used mostly in these sectors. Therefore, it is not surprising that Power of Attorney documents generally do not refer to bankruptcy transactions. This can be a problem because in some states like North Carolina, the Bankruptcy Court will simply refuse to accept Power of Attorney in case the document does not allude to bankruptcy matters. You should understand that the bankruptcy case will be dismissed in case the power of attorney document does not specify something like “bankruptcy filings and related issues”.
Let’s consider an example. You are facing foreclosure and you want to save your house by filing Chapter 13 bankruptcy jointly with your wife. However, you are in hospital and unable to do the paper work yourself. Your wife is busy looking after you. So your son files bankruptcy for his parents using power of attorney. However, your power of attorney document alludes to bankruptcy while your wife’s does not. Under the circumstance, it is likely that your wife would not be eligible for bankruptcy. Filing bankruptcy with the help of someone else through Power of Attorney can be a tricky thing. Therefore, you should consult a bankruptcy lawyer before the document is created. If the document has been already created and the reference to bankruptcy is missing then your presence is needed during the bankruptcy process.