Signing a bankruptcy petition, redux

If you started plucking people off the street and asking them at random what the process of filing for bankruptcy involved, you would find that most people imagine in their head a sort-of real estate closing gone berserk — piles and piles of legalese being shoved at them for the old John Hancock.

They would be mistaken, however.

A small bankruptcy case might involve signing only two pieces of paper with an actual pen.

That’s because the bankruptcy court system was one of the early adapters of an electronic document processing system. Bankruptcy courts have been functioning as paperless offices for almost a decade now. The petitions that get filed with the court are transmitted in electric form over the Internet, which makes signing the papers an anachronism — or does it?

For the most part, the system functions smoothly because the court has all the lawyers and creditors sign up for “electronic signatures,” which can be placed in to documents and substituted for ink ones. All the usual players are registered, in other words, so the system functions well from that perspective.

But what about the debtors? Registration doesn’t make sense for them, since the court doesn’t know in advance who is going to file a petition, and the vast majority of debtors only have one short involvement with the bankruptcy system.

So debtors still need to put pen to ink and ink to paper at least a few times. How it is handled, however, varies from district to district.

In Massachusetts, a debtor needs to sign the third page of the bankruptcy petition in ink, as well as a “declaration of electronic filing” that essentially serves as a temporary registration to the court’s electronic filing system. These documents are scanned by your bankruptcy attorney, and will be filed in electronic form along with the rest of the paperwork.

In New Hampshire, signing the petition itself is advisable, but a longer and more all-purpose version of the “declaration of electronic filing is in use, and must be signed above all. This declaration is then given to your attorney, who snail-mails it to the court — meaning the bankruptcy court in New Hampshire isn’t 100% paperless after all!

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