What Your Signature On Your Bankruptcy Papers Really Says

Wish I had a buck for every time a client has told me, “Yes, I signed it, but I didn’t read it”.

This is usually delivered as though the signature had no meaning if it wasn’t coupled with actual reading.

Unfortunately, it isn’t so.

Not true in commerce in general, and certainly not true when you sign bankruptcy papers.

Signatures identify

Why does the Bankruptcy Code require the debtor to sign the documents filed to initiate the case?

First, the signature serves to identify the person who is taking this action. Signatures are unique, or nearly so.

The signature then allows us to determine that the person who signed is the same person as the one whose name is on the schedules.

Signatures vouch for the document

More significantly, the signature of the debtor serves to authenticate the information in the bankruptcy schedules.

It is the debtor’s shorthand way of saying “I own this information”.

This becomes important in bankruptcy cases if there is a claim that the debtor misstated or omitted something. The signature, right below the declaration that the document is signed under penalty of perjury, commits the debtor to that version of the facts.

Errors not irreversible

This is not to say that innocent errors cannot be corrected once the schedules are signed  filed.

Schedules are amended all the time, usually without challenge.

The lack of challenge however, is generally related to the magnitude of the change presented in the amended schedule.

Try telling a judge you “forgot” about the two carat diamond ring or the power boat, and you may have credibility problems.

Engage brain when you sign bankruptcy papers

Most omissions in the schedules come about because the debtor sees the signature as a meaningless flourish.  It’s just one last thing to get this job done.

And the signature doesn’t take any time at all.  It’s the time to both read, and think, about the question asked and the answer proposed by counsel, that’s critical.

Carelessness about the completeness of the schedules at best increases the cost of a bankruptcy proceeding; at worst, carelessness puts the discharge at risk.

Bankruptcy is a serious step, which should return a significant benefit to the debtor.

It is worth the time to read before you sign.

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