Is it possible to file bankruptcy virtually without meeting my attorney?

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Chapter 7 Bankruptcy

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In a word, yes, in light of the changing business landscape during COVID-19, even the bankruptcy courts are easing up on in person requirements, such as the meeting of creditors.

The coronavirus is shaping up to be a once in a lifetime financial event. Although no one knows what the economic impact will be (and we are all hoping for a recovery) unemployment filings have reached record highs.

There has been such a demand for the small business loans, called PPP loans, offered by the SBA that the program has dried up and is being replenished by Congress as we write this article. 

Retail and the food industry have been particularly hard hit by mandatory shutdowns.

And like it or not, many people who suffer from a job loss, or reduction income, will turn to the bankruptcy courts to get a fresh start financially. And as we have discussed in previous posts, bankruptcy isn’t all bad. Under the right circumstances, bankruptcy can be a breath of fresh air for families suffering from creditor harassment.  

3 times bankruptcy requires in-person attendance 

However, bankruptcy has historically been an in person business. There are three times a debtor will have to attend court, or visit a layer’s office during a typical bankruptcy case. 

  1. The attorney consultation
  2. To sign the bankruptcy petition 
  3. To attend court, otherwise known as the 341 meeting 

Here’s the problem – many clients don’t want to travel to a lawyer’s office and then to a crowded court room at the 341 meeting of creditors while a global pandemic is ongoing.

State officials agree which is why you see shelter in place orders everywhere in all 50 states. 

So, what are the current rules for attending in person meetings while COVID-19 continues to negatively impact our communities? 

We asked long time Los Angeles bankruptcy attorney Erik Clark for guidance. His firm, Borowitz & Clark, is offering 100% virtual consults and filings while COVID-19 is ongoing. 

Virtual bankruptcy during COVID-19

What software are you using for virtual consults? Are any challenges popping up with regularity? 

Attorney Clark: “Most clients have said they do not want virtual consults but rather telephonic.  We do use Google Meet for singing appointments which have had some minor tech issues.  We work through the tech issues with clients when they arise and overall it has worked very well.”

Can bankruptcy petitions be signed via email or DocuSign legally? 

Attorney Clark: “Yes, we use Pandadoc and it is working fine.  The courts are OK with digital signatures during the COVID shutdown.”

What about court? Will 341 meetings be virtual from now on? 

Attorney Clark: “During this pandemic, in-person court isn’t required. Some 341 meetings are being conducted via Zoom and others are telephonic.” 

The future of virtual bankruptcy 

As Attorney Clark made clear, during the COVID-19 pandemic, virtual bankruptcy is allowed by the courts. 

Will these policies remain in place for months and years to come? 

Only time will tell, but for now the bankruptcy world has adjusted and allows for bankruptcy petitions to go forward using a WiFi connection.