Filing Chapter 7 On Behalf of Debtor
Can another person file a Chapter 7 on behalf of a debtor? Presume that the debtor is incapacitated, physically and mentally due to stroke, and the other person is the holder of debtor’s “General Durable Power of Attorney.” Will the “G.D.P.A” suffice, or must the debtor undergo a conservatorship on his behalf in order that the conservator file for debtor or would some other filing process be preferable?
Re: Filing Chapter 7 On Behalf of Debtor
Generally, a durable power of attorney for financial purposes authorizes an agent to act on behalf of a principal notwithstanding the principal’s incapacity. Assuming the durable power of attorney specifically authorizes bankruptcy, it should not be a problem. Nonetheless, it depends on whether the Trustee or any of the Creditors raise the issue and ultimately for the Judge to decide whether to accept the filing of the bankruptcy.
I personally heard of one case where the bankruptcy petition was filed under a defective power of attorney. Even though certain creditors opposed the filing, the Trustee chose to move forward with the case and administer assets of the estate.
One way to avoid the issue of the filing by the agent is to have three “friendly” creditors file an involuntary bankruptcy petition against the debtors. There are various restrictions.
If you need additional information, you may call my office at (818) 992-6588.
Shai Oved
The Law Offices of Shai Oved
20700 Ventura Blvd., Suite 220
Woodland Hills, CA 91364