I recently received the following question from a web site visitor:

Jonathan, my mother is 67 years old and suffers from early onset dementia, most likely Alzheimers.   She recently moved into an assisted care home but my sisters and I have discovered that she has not been paying any bills and that the mortgage is about to go into foreclosure.   I downloaded a power of attorney form from the Internet and had her sign it.  Am I allowed to use the power of attorney to file a bankruptcy on her behalf?  Thanks.  Jill.

Jill, here are my thoughts:

First, I am sorry to hear about your mother’s medical condition.  As I’m sure you know, you and your family have a long, difficult road ahead of you and I wish you the best.

As far as filing bankruptcy, it is possible for an incompetent person to file bankruptcy, but a power of attorney is not the best method.  Instead, I would suggest that you contact an elder law attorney to discuss filing a petition for legal guardianship in the Probate Court in the appropriate county.  Before issuing the order appointing someone – presumably you or your sister – as guardian for your mother, the probate judge will review medical evidence and take testimony to determine who is the best person to serve as guardian and what the powers of the guardian should be.

Decisions by guardians must be reported to the probate judge at least annually.  Further, it would be wise to reveal to the probate judge your plans to file bankruptcy to preserve your mother’s assets.

Guardianship vs. Power of Attorney

A court issued guardianship is a much more robust instrument than a power of attorney.  More importantly for bankruptcy purposes, the bankruptcy judge will be a lot more comfortable with a probate court guardianship order than a power of attorney.  Unlike a guardian a person with a power of attorney has not been vetted by a probate judge and the bankruptcy judge has no way of knowing if the debtor was even competent at the time she signed the power of attorney, or if there are other relatives who might have interests different from yours.

Further, it is unlikely that your downloaded power of attorney even mentions bankruptcy, and the bankruptcy judge does not want to have to decide on limited evidence whether the power of attorney you now have is sufficient to authorize you to file bankruptcy.

My colleague, elder law attorney Diane Weinberg, frequently drafts powers of attorney and she points out that to be effective a power of attorney must be specific.  For example, if you want to use the power of attorney to negotiate repayment terms with your mother’s bank or to proceed with a bankruptcy, then the power of attorney should specifically include this authority.  Diane also points out that a power of attorney for health care – which she highly recommends for anyone with a elderly parent – needs to be carefully drafted to meet both state law and HIPAA requirements,  and probably should be a separate document.

Obviously, if you are facing an immediate deadline and all you have is a power of attorney, you may have to use it, but if you can get to probate court first, that would be the way to go.


Jonathan Ginsberg represents honest, hardworking men and women in the Atlanta area who need bankruptcy protection. Call him at 770-393-4985 for a confidential discussion.

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