Legal Question in Bankruptcy in California

Re: Bankruptcy and Power of Attorney

A power-of-attorney is an authorization to act on someone's behalf. It is not an assumption of liabilities.

Re: Bankruptcy and Power of Attorney

FYI - A power of attorney expires on the death of the principal.

An "attorney in fact" steps into the shoes of the principal to pay debts and make financial decisions. It is the principal who ultimately is liable for any debts. Because he has filed bankruptcy, most (if not all) of his debts will be discharged in a few months. Thus, unless your husband is a joint signer on some of your father-in-law's accounts, there shouldn't be anything to worry about. Hope that puts your mind at ease for the weekend.

Re: Bankruptcy and Power of Attorney

The power of attorney appoints your husband to act on his father's behalf, but the father's debts remain the father's. The bankruptcy won't affect your husband unless he agreed to be liable on his father's debts as well (a power of attorney document does not typically do this). After the bankruptcy, as his father incurs new debt, your husband should be sure he does not co-sign with his father for any of it, and he will avoid liability.

At his father's death, creditors can recover only from the father's assets--at that time, it's best to see an attorney, as many assets are exempt from creditors.