Minding your own business is a virtue, but sometimes a person you care about may end up in a financial emergency that they can’t escape on their own. We receive calls from many caring friends and relatives who want to know how they can help someone they love file for bankruptcy. But when it’s for an adult child who has a tendency to procrastinate, or for a longtime friend who is in denial about their financial issues, it’s usually preferable to stay out of it until they are ready to seek the help for themselves. There are other situations where your help with bankruptcy tasks could be absolutely necessary. Read on to learn more about preparing for a bankruptcy consultation for someone you care about. When you’re ready to schedule with a knowledgeable Arizona bankruptcy lawyer, call 602-649-4949 for your free consultation with Atlas Bankruptcy Lawyers.
When It’s Appropriate For a Loved One To Assist With Bankruptcy
Most bankruptcy debtors want as few people to know about their filing as possible. But for others, proceeding without a little extra help is risky business. The fact that you are aware of a loved one’s financial struggles doesn’t necessarily mean that you should get involved. But if any of the following factors apply, it may be appropriate for you to attend the consultation, and potentially be involved in other steps throughout the bankruptcy process:
- The debtor is facing criminal charges or is about to serve an incarceration sentence
- The debtor has unavoidable interstate or international travel planned in the near future
- The debtor is in a coma or has a traumatic brain injury
- The debtor is in the military and could be deployed in the near future
- The debtor is elderly and may have a degenerative cognitive disorder like dementia
- The debtor has a learning disability that interferes with their ability to manage their own finances
- The debtor is emotionally vulnerable or in a financially abusive relationship
- The debtor has a language barrier
- The debtor is committed to a mental health facility or is otherwise mentally incapacitated
Documents To Have Ready For The Consultation
Even if you have a detailed understanding of your loved one’s lifestyle and finances, remembering those details can be difficult, especially when you have your own personal issues to keep in mind. The more information you have available for a bankruptcy consultation, the more sure you can be about things like your loved one being income eligible for their selected bankruptcy chapter, and their assets being protected by state bankruptcy exemptions. That’s why you should gather as many of the following documents as possible in preparation for a bankruptcy consultation on someone else’s behalf:
- Their last 6 months’ of paystubs or income information, or as far back as possible
- Their most recent tax returns
- Their child support and spousal maintenance orders, if applicable
- Their bank account statements, including retirement savings and other investment accounts
- Their credit card statements from the last several months, especially if excessive spending is an issue
- Their outstanding bills and balances, especially debts that are not yet listed on their credit report
- Their documents for secured loans, like a home mortgage or auto loan
- Any collection notices they have received, or judgments or lawsuits filed against them
- Real estate deeds and vehicle titles
- Documentation of regular monthly expenses like rent or mortgage statements, utility bills, insurance coverage plans, child care costs, etc.
- Tax returns and documents from any businesses owned by the debtor
Should The Debtor Be There?
In most instances, it is helpful for the actual debtor to be present at a bankruptcy consultation, even if their loved one will be doing most of the legwork for their case. Bankruptcy is a life-changing financial and legal process that will have a significant impact on the debtor’s credit. The debtor should be fully aware of the ramifications of declaring bankruptcy, but also of the benefits that they will receive from a successful filing. But if your loved one is incapacitated, it might not even be possible to bring them to a consultation where they wouldn’t retain information anyway. If it is difficult for you or your loved one to travel, conducting a bankruptcy consultation by phone will be more convenient. If you consult with bankruptcy attorneys over the phone, consider scheduling them when your loved one is available to help you answer questions for which you might not know the exact answer. Ultimately, you understand your loved one the best in this situation, and can determine whether or not it is appropriate for them to be a part of their own bankruptcy consultation.
Do I Need a Power Of Attorney?
A power of attorney is a legal document that gives one person, the agent, the authority to make important decisions, including legal filings, for another person, the principal. If someone wants to help their loved one schedule consultations, gather documents, and review information from their bankruptcy attorney and trustee, they are free to do so without a power of attorney. But if someone wants to actually draft and file a bankruptcy petition for their loved one, a power of attorney becomes necessary.
There are two main types of powers of attorney: a general power of attorney and a special power of attorney. A general power of attorney gives the agent a broad range of powers, but many bankruptcy courts find this to be insufficient authority to declare bankruptcy on someone else’s behalf. Because bankruptcy is such a life-changing legal matter, a case can be dismissed if the power of attorney doesn’t specifically authorize the agent to file for bankruptcy for the principal. A power of attorney granting authority for “financial matters” or “bank transactions” likely won’t be enough either. A power of attorney meant to grant the agent authority to file for bankruptcy should explicitly say so, mentioning United States Bankruptcy Code and the right to sign bankruptcy-related documents and attend case meetings and hearings. The agent should include a declaration when filing that indicates that they have the authority to declare bankruptcy on behalf of the principal.
Looking To Assist a Friend Or Relative With Bankruptcy? Contact Our Arizona Debt Relief Firm For Your (Their) Free Phone Consultation.
It’s completely normal to feel stressed when contemplating and filing for bankruptcy. But you may feel even more pressure if you are pursuing debt relief through bankruptcy on behalf of a close friend or family member. Mistakes in a bankruptcy petition can have devastating consequences, like the seizure of funds and assets, case delays, or even the bankruptcy case being dismissed. One of the best ways you can help your loved one have a smooth bankruptcy filing is by consulting with an experienced bankruptcy lawyer on the matter. This is an opportunity to confirm eligibility, prepare for filing, and learn more about how life will look different after bankruptcy discharge. If you’re researching firms for your loved one to declare bankruptcy with, there is no risk or obligation to schedule a free phone consultation with a dedicated member of our team at a leading bankruptcy lawyer in Arizona. Schedule your free consultation with Atlas Bankruptcy Lawyers today by calling 602-649-4949.
