This is the third post in a series describing UpRight’s recommendations to the ABI Commission on Consumer Bankruptcy. Start at the beginning.
Electronic signatures and digital storage of records have become commonplace in most industries. The U.S. adopted the Electronic Signatures in Global and National Commerce Act (E-Sign Act) in 2000, and the Uniform Electronic Transactions Act has been adopted by 47 states, the District of Columbia, and the U.S. Virgin Islands. The three states that have not adopted the uniform act have their own statutes authorizing and recognizing electronic signatures.
Requiring “wet signatures” in bankruptcy is burdensome for consumers and may serve as a barrier or delaying factor for those most in need of assistance. Often, this requirement results in multiple trips to the bankruptcy attorney’s office, with the debtor incurring travel expenses and losing work time simply to sign documents.
The safeguards provided by wet signatures could just as well be accomplished through the type of electronic signature authentication routinely used in commerce.
Similarly, standard business practice has evolved to allow for digital storage of records. Courts’ paper files have given way to electronic records, and attorneys have moved away from rows of filing cabinets toward cloud-based storage of case files.
As electronic processes continue to evolve and paper records and wet signatures become increasingly outdated, the security and quality of authentication associated with digital signatures and storage will quickly surpass outdated hard copy methods. Electronic signatures should be recognized for all purposes under the Bankruptcy Code, just as they are in virtually all areas of national and international commerce. Further, to the extent that the Bankruptcy Code requires maintenance of records, the Code should expressly provide that storage of such records may be electronic and cloud-based.
