Can I File for Bankruptcy If I Can't Leave the House Due to Coronavirus?

Find out how to file for bankruptcy while observing quarantine and social distancing rules during the COVID-19 outbreak.

By , Attorney

Dealing with the uncertainty of the COVID-19 pandemic is especially challenging for those who need to file for bankruptcy. Fortunately, many courts have loosened rules temporarily, making it easier for bankruptcy lawyers to represent quarantined clients. So if you're in isolation due to the coronavirus, rest assured many bankruptcy lawyers are ready to meet the challenge of helping you get out of debt.

Learn more about the temporary changes to bankruptcy procedures designed to curb the spread of COVID-19.

Finding a Bankruptcy Lawyer During the Coronavirus Outbreak

Representing yourself during the coronavirus outbreak will likely be difficult, especially if you have ongoing health problems, so your first challenge will be hiring a bankruptcy attorney.

Because conducting in-person interviews won't be an option, you'll want to consider asking friends, family, and other attorneys for referrals. You can also try finding a lawyer using an online directory or by going through your local or state bar association.

When contacting candidates, verify that the office can represent you while you're in isolation, and provide necessary accommodations, such as:

  • phone or video conferencing for attorney/client meetings and document review
  • online, email, or dropbox options for submitting and signing documents
  • the availability of a telephonic appearance at the 341 meeting of creditors (the one hearing all filers must attend).

Also, ask whether the office offers free initial phone consultations. Learn more about the benefits of hiring a bankruptcy lawyer.

Filing for Bankruptcy During the Coronavirus Outbreak

While in quarantine, you'll rely on technology to communicate with your lawyer and the court. You will likely need access to a computer, a printer, and a scanner (although some lawyers might let you use your phone to copy documents). Mailing documents or having a friend or family member deliver them can also be an option.

Here's why these things will be important.

Exchanging Bankruptcy Documents Virtually Due to COVID-19

Filing for bankruptcy is form-intensive work. You should expect your lawyer to ask you to complete a lengthy financial questionnaire. You'll also need to gather together lots of financial documents that support your questionnaire answers.

In a normal situation, the lawyer would give you a packet that you would return to the office later. That won't work when you're in quarantine, of course. But many attorneys already have workable systems in place.

For instance, some lawyers start the process by providing debtors with a link to a website where the debtor can complete the questionnaire online and possibly upload paycheck stubs, bank statements, and other documents needed when filing for bankruptcy.

Others email the bankruptcy questionnaire and ask the client to scan and return it by email. If scanning isn't possible, you could mail in the documents, or a friend or family member could deposit them in an office dropbox (assuming that essential travel is permitted). Just keep in mind that according to some reports, the coronavirus can remain viable on paper and cardboard for an extended period.

Completing Required Bankruptcy Courses

You'll complete two courses online—one before you file for bankruptcy and one afterward. Your attorney will explain how to access the courses. Learn more about credit counseling and debtor education courses in bankruptcy.

Meeting With the Bankruptcy Lawyer Virtually Due to COVID-19

You can expect to consult with your lawyer three to four times before the office files your case. The office can set up meetings by phone or through video conferencing.

  • Getting to know the lawyer. At the initial consultation, you'll ask questions, listen to the attorney's assessment, and determine whether you want to retain the lawyer. A lawyer who knows enough about your case might advise you of your options at that meeting.
  • Deciding how to proceed. It's common for debtors to forget essential details inadvertently, or simply not to know the relevance of particular information at the first consultation. In this meeting, you'll discuss anything new that came up in your questionnaire. Therefore, this won't be needed unless your questionnaire answers and financial documents provide information that differs from what you and your lawyer discussed at the initial meeting.
  • Reviewing the final petition. Once the bankruptcy petition is complete, the lawyer will go over it with you for accuracy. After agreeing that all of the information contained in the petition is true and correct, the client must sign it under penalty of perjury. A less than truthful debtor faces potential bankruptcy fraud charges. Keep reading to find out how signing requirements have changed.

"Wet Signatures" Waived by Some Bankruptcy Courts Due to Coronavirus Concerns

Some courts have temporarily relaxed a rule requiring a bankruptcy attorney to obtain an original or "wet signature" on the bankruptcy petition before filing it online with the court. The relaxing of this rule is very beneficial to lawyers and clients alike during the coronavirus pandemic. It limits the amount of contact required before filing a case. More courts are adopting similar rules each day.

If your local court has waived the "wet signature" requirement, your attorney should be able to file your case online immediately. Even if your local bankruptcy court hasn't yet loosened this requirement, some lawyers might agree to another workaround. For instance, it might be possible to review documents by phone or video conferencing and file the case after the attorney receives the wet signature by mail or dropbox.

Telephonic 341 Meeting of Creditors During the Coronavirus Outbreak

After filing the case, every debtor must appear at least once in the bankruptcy case at a hearing called the 341 meeting of creditors. At the meeting, the bankruptcy trustee appointed to the case checks the debtor's identification and asks each debtor questions about the petition under oath.

Typically, the trustee schedules approximately ten cases per hour in a meeting room at the courthouse or at an offsite location. Most meetings have at least thirty people present when taking into account spouses and attorneys—too many by coronavirus pandemic social distancing standards.

Because of this, trustees have already been ordered to stop conducting in-person meetings during the coronavirus (COVID-19) pandemic, so the meeting requirement won't be problematic for you. Instead, hearings take place telephonically. Your attorney will give you the information you need to call into the meeting from home.

Court Closures During the COVID-19 Outbreak

Although courts in New Jersey, Florida, Washington, and California have closed physical locations as of the writing of this article, all have made provisions to continue operations. Your lawyer can explain whether your court is at risk of closing and any potential ramifications.

For more updates, see COVID-19: The Law and Your Legal Rights During the Coronavirus Outbreak.

Finalizing Your Bankruptcy Case

If you file for Chapter 7 bankruptcy, all you'll have left to do is wait for your discharge—the order that wipes out your debt.

In a Chapter 13 case, your attorney will appear at a Chapter 13 confirmation meeting telephonically (and you will too if you're needed—it will depend on the custom of your court). If the court approves your repayment plan at the confirmation hearing, you'll make the payments according to the agreed-upon schedule for three to five years.

Learn about the differences between Chapter 7 and 13 bankruptcy.

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