The Short Answer
You generally cannot use a standard Power of Attorney to file bankruptcy on someone else's behalf — but you can if the document specifically includes the word "bankruptcy" or "bankruptcy filings and related matters." Most off-the-shelf Power of Attorney forms don't include that language, and North Carolina bankruptcy courts will dismiss any filing based on a POA that omits it. If the existing document doesn't have the right language, you have two options: create a new POA that does, or work with a bankruptcy attorney to explore whether the actual debtor can participate directly.
Situations often arise where a potential bankruptcy client is hospitalized, out of town or out of the country, or otherwise unable to sign the necessary paperwork or appear at the necessary court dates for a bankruptcy filing. Often, these potential bankruptcy clients have a valid Power of Attorney document allowing a loved one to sign important papers on their behalf. The question is, can a loved one use a Power of Attorney to file a bankruptcy on behalf of another person?
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Generally, most Power of Attorney documents are drafted using standard language that includes real property transactions, banking transactions, insurance transactions, etc. Most Power of Attorney documents do NOT, however, include “bankruptcy transactions.” In North Carolina, and in many other courts, the Bankruptcy Court will only accept a Power of Attorney if the Power of Attorney document specifically names “bankruptcy” as an included transaction. In other words, if the document does not say the word “bankruptcy filings and related matters” or similar language, then the Bankruptcy Court will not accept the Power of Attorney and the bankruptcy will be dismissed.
An example of this would be the following case: An elderly couple has fallen behind on their mortgage payment. They have lived in their house for almost fifty years and have refinanced a few years ago. Due to circumstances involving hospital stays and nursing home stays, the couple has been unable to make their mortgage payment and the house is in foreclosure. In order to save their home they are considering filing for a Chapter 13 bankruptcy. The couple’s daughter is the Power of Attorney for both the mother and the father. The mother’s Power of Attorney document specifically includes the words “bankruptcy filings” but the father’s Power of Attorney does not. The daughter, as the Power of Attorney for both her mother and father, files a joint bankruptcy petition on their behalf in order to save the home. It is likely in this case that the father would be dismissed from the bankruptcy because the language in his Power of Attorney document did not include the word “bankruptcy.”
If you or a loved one is considering bankruptcy and/or considering having a Power of Attorney document created, it is important to include bankruptcy in the Power of Attorney document. You will need to speak with the lawyer preparing the Power of Attorney document to ensure that the necessary language is included.
If the Power of Attorney document has already been created and does not include the proper language, there are a couple of options. First, a new Power of Attorney document could be created that includes the proper language. Second, you could speak with a bankruptcy lawyer about how the bankruptcy could be filed without a Power of Attorney. This option would require the presence and competence of the actual debtor.
Key Takeaways
- North Carolina bankruptcy courts require a Power of Attorney document to explicitly name "bankruptcy" as an included transaction — generic legal language is not enough.
- A bankruptcy filing made under a POA that lacks bankruptcy-specific language will likely be dismissed, even if the rest of the document is valid and broad.
- Standard POA forms routinely omit bankruptcy transactions, so never assume an existing document covers it without checking the exact wording.
- If a POA was already created without the right language, a new document can be drafted that corrects the omission — this is often the fastest fix.
- Both spouses in a joint filing need qualifying POA documents; if only one qualifies, the other may be dismissed from the case, potentially defeating the purpose of filing together.
- If amending the POA isn't possible, a bankruptcy attorney can advise on whether the debtor can participate directly despite their situation.
Attorney Insight
The mistake I see most often is a family member showing up with a thick, official-looking Power of Attorney document — sometimes notarized, sometimes prepared by an estate planning attorney — and assuming it covers everything. When I scan it and the word "bankruptcy" isn't there, the court won't accept it, full stop. I've seen cases where one spouse's POA passed muster and the other's didn't, which can unravel an entire joint Chapter 13 filing right when a family is trying to stop a foreclosure. If there's any chance bankruptcy might be needed, get that language added to the POA document before a crisis hits — not after.
