Can I Deal With My Parents’ Debts?
Power of Attorney to Deal With Parental Debts
If you believe your parents are struggling to manage their finances, you may want to assist them with how they’re handling their debts.
However, you’ll need legal authority in order to be able to make decisions on their behalf.
If your parents aren’t willing to let you assist them or don’t accept your advice, you may want to consider applying for Power of Attorney.
Under Canadian law, obtaining Power of Attorney gives you the right to manage someone’s property and finances on their behalf.
However, there are responsibilities that come with being a Power of Attorney, so it’s not something that should be taken on lightly.
Although someone can voluntarily appoint a Power of Attorney, the courts can also appoint someone to act as a Power of Attorney for someone if they are unable to manage their own finances.
If a parent has been diagnosed with a medical condition which affects their ability to manage their funds appropriately, for example, the courts may deem it suitable for a Power of Attorney to be appointed.
Who can be a Power of Attorney?
Although the term ‘Power of Attorney’ implies a legal background, you don’t have to be legally qualified to be a Power of Attorney.
In fact, almost any adult can act as a Power of Attorney.
While a family member or close friend might be a good choice as a Power of Attorney, an independent individual could also be appointed by the courts to act as someone’s Power of Attorney.
What decisions can you make as Power of Attorney?
Becoming a Power of Attorney gives you the right to manage someone’s finances and property, providing you do so in their best interests.
This can mean anything from using their funds to pay their utility bills to filing for bankruptcy and eliminating their debts.
If your parent or parents are having problems dealing with debts, they may be happy for you to be appointed as their Power of Attorney.
Alternatively, you could ask the courts to intervene so that you’re given the right to act on their behalf.
Once you’ve been appointed Power of Attorney, you’ll have the right to access the relevant documentation and discover more about their financial situation.
Can you file for bankruptcy on behalf of someone else?
Usually, you can’t file for bankruptcy on someone else’s behalf.
As Power of Attorney, however, it is within your rights to file for bankruptcy if you’re acting in the individual’s best interests.
As consumer proposals and bankruptcies are always dealt with via licensed insolvency trustees (LITs), there will be a regulated professional available to help you navigate the process.
Dealing with your own debt problems can be difficult and things can be harder when you’re acting on behalf of someone else.
However, assisting your parents with debt problems could relieve them of a significant burden and give them the freedom to enjoy their retirement.
To find out more about becoming a Power of Attorney or filing for bankruptcy, contact Bankruptcy Canada now.