Select Page

A bankruptcy judge in the Los Angeles area held a hearing to address concerns over signatures on documents filed in a Chapter 7 case. The judge concluded that many of the documents did not comply with federal or California law, but also held that the debtor himself was not at fault. In re Bilinski, No. 1:12-bk-19984, order (Bankr. C.D. Cal., Jan. 7, 2013). Personal bankruptcy cases under Chapter 7 or Chapter 13 often require a substantial amount of documentation in order to provide a full picture of the debtor’s financial situation to the creditors, the trustee, and the court. The law requires the debtor to sign many documents personally after verifying their accuracy and authenticity. Any failure to follow these requirements could delay a bankruptcy case or, in extreme cases, result in a denial of discharge.

In the present case, the debtor filed several schedules and a motion for sanctions for an alleged violation of the automatic stay about two weeks after filing a Chapter 7 petition. At a hearing on the motion for sanctions, the debtor told the court that he did not personally sign any of the schedules. The debtor’s attorney told the court that his legal assistant signed the debtor’s name on the schedules after obtaining the debtor’s verbal permission to do so. The debtor had not provided a power of attorney, and the signatures made by the legal assistant did not indicate that someone other than the debtor was signing. The court issued an order to show cause regarding the signatures’ compliance with state and federal law.

A debtor must verify certain documents filed in a bankruptcy case. According to California law, this means that the debtor must provide an affidavit stating that the information contained in the document is true based on the debtor’s knowledge, or the debtor’s information and belief. Cal. Code Civ. Proc. § 446(a). In limited circumstances when the debtor is unavailable, the debtor’s attorney can sign on the debtor’s behalf, but must have a power of attorney and must indicate on the document that the debtor is not personally signing. Furthermore, a court may determine that documents not signed by the debtor do not meet the verification requirements for a bankruptcy case.

The court in the present case noted that the signature requirements for the debtor serve to protect the debtor from possible future complications, including challenges to the accuracy of the debtor’s information or objections to a bankruptcy plan. Information provided to the court directly by the debtor seemed to contradict information contained in the schedules filed on the debtor’s behalf, complicating and delaying the case. The court did not find that the debtor acted improperly. It ordered disciplinary action against the debtor’s attorney, but did not take further action to delay the bankruptcy case.

When individuals find themselves unable to service their debts with their income, Chapter 7 or Chapter 13 bankruptcy may be a way to pay their bills and arrange their finances. The bankruptcy process allows people to liquidate assets in order to make payments, to develop a more manageable payment schedule, and, at the close of the case, to discharge the remainder of some debts. Bankruptcy attorney Devin Sawdayi has handled personal bankruptcy cases for clients in the Los Angeles area in since 1997, providing legal services with dignity and respect. To schedule a free and confidential consultation, please contact us today online or at (310) 475-9399.

More Blog Posts:

Understanding the Chapter 7 “Means Test”, Los Angeles Bankruptcy Lawyer Blawg, October 4, 2013

Late Challenge By Creditor Allowed in Chapter 7 Case Because Debtor Did Not Give Adequate Notice, Los Angeles Bankruptcy Lawyer Blawg, August 30, 2013

Mortgage Debt is Dischargeable in a Chapter 7 Bankruptcy Case, According to Los Angeles Federal District Court, Los Angeles Bankruptcy Lawyer Blawg, August 28, 2013