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When Bankruptcy is Necessary for an Incompetent Debtor

Posted By Allmand Law Firm, PLLC || 3-Jun-2013

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.


Categories: Bankruptcy
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