When Bankruptcy is Necessary for an Incompetent Debtor

Most often when you think about
filing bankruptcy the process is completed by the debtor seeking protection. Yet, there
are special circumstances in which a debtor may not be able to file a
petition due to mental, physical, or financial challenges. It may actually
make sense for them to file bankruptcy, but they are unable to make important
decisions on their own; in other words they are not competent mentally
to go through such a process by themselves.

The good news is bankruptcy has special rules and regulations for incompetent
individuals. Meaning, they can have a designated person to help them file
their petition and proceed through the bankruptcy process on their behalf
(also referred to as Power of Attorney). Basically, the incompetent person
would have a representative such as guardian or conservator file bankruptcy for them.

The bankruptcy court can also appoint a representative for the incompetent
person if they do not have someone beforehand. Orders issued by the court
may also help protect interests of the debtor. Keep in mind, a Power of
Attorney who is granted the action of filing bankruptcy on behalf of the
incompetent person may have a higher chance of being granted an approval
by the court.

Sufficient conservatorship or guardianship for the incompetent person prior
to filing bankruptcy may increase chances for a successful outcome. If
bankruptcy is an option for your loved one or person of interest who is
incompetent, discuss options with an experienced bankruptcy attorney.

Reference:
http://www.txbankruptcyblog.com/2013/05/articles/bankruptcy-news/my-parent-is-incompetent-and-needs-bankruptcy/

By | 2017-12-13T02:18:43+00:00 June 3rd, 2013|Bankruptcy|Comments Off on When Bankruptcy is Necessary for an Incompetent Debtor