Does Federal Law Already Allow Digital Signatures for Bankruptcy Petitions?

In the age of technology, digitalization of documents has become far more common. In the financial and legal realm, many organizations have made use of electronic document submission to expedite the process for both businesses and clients. But, when it comes to bankruptcy petitions, are digital signatures allowed? Here, the Maryland individual and small business bankruptcy attorneys at Grossbart, Portney & Rosenberg, P.A. discuss federal and state law regarding digital signatures of bankruptcy petitions, and how this can impact your bankruptcy filing process. 

Digital Signatures in Bankruptcy Filings Authorized Through Federal Law 

The short answer of if digital signatures are allowed in bankruptcy petitions is yes, due to the Electronic Signature in Global and International Commerce Act of 2000 (ESGICA). Under this act, electronic signatures are allowed under the following guidelines: 

  1. In general – Notwithstanding any statute, regulation, or other rule of law (other than this subchapter and subchapter II), with respect to any transaction in or affecting interstate or foreign commerce—
    1. a signature, contract, or other record relating to such transaction may not be denied legal effect, validity, or enforceability solely because it is in electronic form; and
    2. a contract relating to such transaction may not be denied legal effect, validity, or enforceability solely because an electronic signature or electronic record was used in its formation.

To simplify these procedures, a document may not be denied by the court or other authority solely because it was signed electronically, making it faster for debtors, creditors and other parties in the bankruptcy process to consolidate documents quickly. When consolidating your bankruptcy petition, especially during this time of the novel coronavirus,  obtaining signatures in-person can be exceedingly difficult, hindering you from moving forward with your bankruptcy filing. 

Electronic Signatures Provide Additional Security Measures During Bankruptcy Filings

While the idea of electronic bankruptcy filings can feel suspicious at first glance, the incorporation of additional security features makes electronic bankruptcy petitions a safer and more efficient option. Digitally signed documents can be encrypted or stamped before they are sent out to the relevant parties, ensuring that there is no way for the document to be altered, unlike with traditional in-person signatures. Furthermore, the electronic filing process can expedite your bankruptcy filing exponentially. If your lawyer discovers that there was an error on the part of your creditors when providing documentation, you are able to rectify these errors in a legally binding format quickly. Finally, electronic bankruptcy petitions allow for each party to have access to the files needed in an organized state, giving debtors the opportunity to compile many important financial documents in one place and move forward with their filing, helping them return to normal life as fast as possible. 

For businesses as well, electronic bankruptcy petitions are a great benefit. For businesses of all sizes, there are likely to be a variety of creditors that your business is involved with, which may be located all across the state or even country. When going through the bankruptcy process for your business, being able to obtain documents from these businesses electronically can ensure that all creditors are properly documented and your bankruptcy petition is accurate. 

Speak With the Qualified Bankruptcy Attorneys at Grossbart, Portney & Rosenberg, P.A. 

The bankruptcy process can be complicated, and with changes in processes for many businesses and creditors during the current coronavirus pandemic, being knowledgeable about your filing can help avoid unnecessary time and expenses. We understand that this process can feel overwhelming, which is why the qualified attorneys at Grossbart, Portney & Rosenberg, P.A. make it our top priority to guide our clients through every step of the bankruptcy process. Our office is currently optimized for Zoom and Google Meet, and we are happy to provide professional counsel either in-person or virtually to suit your needs. To learn more, schedule a free consultation with our Baltimore office today.