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Bankruptcy Law Roundup

Sharp Thinking

No. 140 Perspectives on Developments in the Law from Sharp-Hundley, P.C. January 2017

In Growing Trend, Illinois Court Imposes Sanctions

For Filing Bankruptcy Papers Without Actual Signature

By Michael L. Olson, Michael@sharp-hundley.com, 618-242-0200

No circumstances ever justify an attorney filing a bankruptcy petition, including its related
schedules and statement of financial affairs, “without first obtaining a
debtor’s actual signature on the documents,” a bankruptcy judge from the
Central District of Illinois recently held.
Emphasizing the seriousness of this misconduct, Judge Mary P.
Gorman held that such actions constitute a violation of “the Bankruptcy
Code, the Bankruptcy Rules, the Judicial Code (Title 28), the Local Rules,
and this Court’s Standing Order.” In re Reubling, 2016 WL 6877796
(Bankr. C.D. Ill. 2016).

In addition to filing the bankruptcy petition without first obtaining his
clients’ signatures, the sanctioned attorney also admitted to filing a first and
second amended plan that were never signed by the debtors, and to filing
an amended bankruptcy schedule before it was signed by his clients. Olson

The sanctioned attorney claimed that he was preoccupied with family health issues and was out
of the office for significant periods of time. As a result, he had authorized his paralegal to file the
petition based on the assumption that his clients had already signed the necessary paperwork.
The judge did not react well to the attorney’s defense, asserting that the attorney “has a duty to
know what is going on in his office and his self-imposed ignorance is no defense. To the contrary, it
is an aggravating factor.”
To make matters worse, the court sampled five previous cases from the same attorney and found
that he had committed another violation when he filed a bankruptcy petition over two months after it
had actually been signed by the client.
In addition to denying his application for compensation, the judge
entered sanctions against the attorney requiring him to personally witness
his clients sign each document before it is filed for a period of one year.
Then for an additional year thereafter, the attorney is required to personally
inspect his client’s “wet signature” on each document before it is filed. To
ensure compliance with these sanctions, the attorney is required to file an affidavit identifying each
document filed and the date the document was signed.

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Sharp Thinking is an occasional newsletter of Sharp-Hundley, P.C. addressing developments in the law which may be of interest. Nothing contained in Sharp Thinking
shall be construed to create an attorney-client relation where none previously has existed, nor with respect to any particular matter. The perspectives herein constitute
educational material on general legal topics and are not legal advice applicable to any particular situation. To establish an attorney-client relation or to obtain legal advice on
your particular situation, contact a Sharp-Hundley lawyer at 618-242-0200 or one of the addresses provided on page 2 of this newsletter.