Bankruptcy and Ad Litem

When an attorney acts as a guardian ad litem in bankruptcy proceedings, it is not exactly the same thing as being granted power of attorney. There are some pros and cons to acting as guardian at litem for an individual who has been deemed incompetent by the courts, or who is being considered by the courts as non compos mentis. Even under the simplest of conditions, modern day bankruptcy filing and proceedings can be exceptionally complicated and protracted, so those involved in an ad litem motion should review their case very carefully before proceeding.

The complications and issues that arise when bankruptcy courts consider appointing guardians ad litem are not frequently discussed in either law schools or even in law journals. It is definitely a minority legal question that has generated some precedence in certain states, but as for wholesale guidance — the bankruptcy judicial system is still without a firm and consistent mandate on the topic, and so has leaned both ways in the matter, sometimes being lenient in the appointments and sometimes rejecting them out of hand. Infants and young children are considered to be unable to represent themselves in bankruptcy proceeding, pro forma. But even in such cases becoming their advocate ad litem is not a rubber-stamped decision or foregone conclusion. 

To make this clearer, here is a paraphrase of standard bankruptcy rule 1004.1, which most courts in the United States take as their benchmark:

When an incompetent adult or an infant is represented by an attorney, committee, guardian fiduciary representative, or conservator, that representative has limited authority to file voluntary petitions in the interetsts of said infant or incompetent adult. Said infants or incompetent adults who may not have a court appointed guardian or representative may still file for a voluntary petition by next of kin, or in adverse circumstances, a guardian ad litem. Courts may appoint a guardian ad litem for debtors who cannot otherwise be expected to represent themselves or are unable to make such decisions for other reasons.

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