Bankruptcy paralegals may prepare bankruptcy petitions without being under an attorneys supervision. The debtor must know in advance which bankruptcy chapter they wish to file. Furthermore, under no circumstances may the paralegal provide legal advice to the debtor. Paralegals may also work for a bankruptcy attorney in a law firm or from a home office as a freelance Bankruptcy Petition Preparer.
What is a Bankruptcy Petition Preparer?
Federal law stipulates how a Bankruptcy Petition Preparer (paralegal) can assist the public with preparing bankruptcy petitions under 11 U.S.C. § 110. Each state has bankruptcy laws in which must be researched prior to preparing any bankruptcy filing. Bankruptcy Petition Preparers may not represent a debtor in court, nor provide the public with any legal advice. Bankruptcy paralegals cannot answer questions such as: Should I file Chapter 7 or Chapter 13 Bankruptcy? Will all my debt be discharged if I file Chapter 7 Bankruptcy? If I file Chapter 13 Bankruptcy can I keep my house? Will I lose my car if I file any chapter of Bankruptcy?
Freelance paralegals prepare bankruptcy petitions for debtors who already know which bankruptcy chapter they want to file. Bankruptcy Petition Preparers request basic personal information from the debtors, tax returns, all three credit reports, tax debt, student loan debt, and any other bills that may not be on their credit report. The paralegal then uses that information to complete the bankruptcy petition, schedules, exhibits, statements, and other court documents. Preparers may also request from the debtor, specific documents or information requested by a court Trustee, and submit those documents to the Trustee on behalf of the client.
What can a Bankruptcy Paralegal handle at a law firm?
Bankruptcy paralegals working at for bankruptcy law firms may perform a variety of tasks related to bankruptcy proceedings. Some tasks a paralegal may handle for a bankruptcy attorney include:
- Handling the bankruptcy debtor screening and interview.
- Gather debtor financial information (old and current bills, tax returns, monthly expense sheet, etc.).
- Drafting bankruptcy petitions, motions, affidavits, schedules, exhibits, appeals, adversarial pleadings, and any other necessary legal documents.
- Research and locate specific laws to be used to benefit a debtor or to prove dischargeability.
- Communicate with creditors and court appointed Trustee on the debtors behalf.
- Schedule bankruptcy hearings and court dates with the court clerk.
- Keep a calendar of case deadlines and remind the attorney in advance.
Each Chapter 7 or Chapter 13 bankruptcy case will require the debtor(s), and their attorney to attend a mandatory hearing called the ‘Meeting of the Creditors’ (341 hearing). Most US Bankruptcy Courts automatically assigned a hearing date after filing the bankruptcy petition. After the 341 hearing, a bankruptcy paralegal is responsible for scheduling other hearings in order to make sure the attorney is available.
*In the event, a debtor is “pro se” and decides not to hire an attorney, only the debtor is required to attend. A debtor IS NOT required to hire a bankruptcy attorney.
How Can I Become a Bankruptcy Petition Preparer?
Anyone interested in becoming a bankruptcy paralegal or a Bankruptcy Petition Preparer should be able to multi-task, have an eye for detail, work with numbers, and meet deadlines. If you are serious in becoming a paralegal contact a local business school and regarding their paralegal certification program. If you would rather attend a college and receive an Associate Degree or Bachelors Degree, many universities now have paralegal degree programs. The degree you earn will determine the salary amount you receive. A Bankruptcy paralegal may open a freelancing business from home or decide to work for a law firm. If you have never seen or prepared a bankruptcy petition before, you may want to read the Federal Bankruptcy Court website for more information and forms. You will find bankruptcy forms, schedules, and exhibits. Also some paralegals purchase bankruptcy petition preparation software which can become a bit costly. Be sure to read your state bankruptcy laws. Some states cap the amount a non-attorney bankruptcy petition preparer can charge.
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