Bankruptcy Paralegals – What they Do and How to Become One

Bankruptcy paralegals may work for a bankruptcy attorney in a law firm or corporation, run a freelance business preparing petitions for many different attorneys, or they may prepare bankruptcy petitions directly for the public, as a Bankruptcy Petition Preparer.

Bankruptcy Paralegals

Bankruptcy Paralegals – What they Do and How to Become One

Bankruptcy Petition Preparers

A Bankruptcy Petition Preparer prepares bankruptcy petitions for the public, as authorized by 11 U.S.C. § 110. He or she may not give legal advice, but may complete a bankruptcy petition for a client, for a fee. Specific advice mentioned in 11 U.S.C. § 110 that a petition preparer may not give to a client includes under which chapter a client should file bankruptcy, whether or not a client’s debt will be discharged, if a client should enter into a reaffirmation agreement, and whether a client will be able to keep his or her home or vehicle. Bankruptcy Petition Preparers also may not represent a client in Court, so those who use petition preparers to complete their bankruptcy petition must go to Court without an attorney, or hire one just for the bankruptcy hearing.

Bankruptcy Petition Prepares work for debtors who already know they want to file bankruptcy, and under which chapter they wish to file. A petition preparer obtains basic information from a client including his or her name, address, social security number, household size, average income, monthly budget, and contact information for all of the client’s creditors. The petition preparer then uses that information to complete the bankruptcy petition and all required schedules, exhibits, and statements. Preparers may also provide copy, fax, mailing, and letter writing services to a client, in connection with his or her bankruptcy petition. For example, a petition preparer may collect documents from a client that have been requested by the Trustee, and fax or mail those documents to the Trustee on behalf of the client.

When preparing bankruptcy petitions for the public, a petition preparer must file certain additional forms with the Court, such as a Declaration and Signature of a Non-Attorney Bankruptcy Petition Preparer and a Disclosure of Compensation of Non-Attorney Bankruptcy Petition Preparer. He or she may also be required to provide the Trustee with a copy of the services contract signed by the Preparer and the Debtor for the provision of bankruptcy petition preparation services.

Bankruptcy Paralegals

Bankruptcy paralegals work for bankruptcy attorneys or law firms, and may perform a variety of tasks related to the filing of a bankruptcy petition and/or adversary proceedings in the Bankruptcy Court. This may include:

Conducting initial intake interviews. As with any type of law firm, initial client intake in a bankruptcy firm may be done by a paralegal, who gathers client financial information so that the attorney can determine which type of bankruptcy filing is appropriate.

Preparing bankruptcy petitions, schedules, and exhibits. Bankruptcy paralegals are often responsible for completing all of the documents needed to file a bankruptcy case. They generally use some type of bankruptcy petition software such as Best Case or Bankruptcy 2013.

Drafting adversarial pleadings. Adversarial proceedings may occur when there is a dispute about a debt or the dischargeability of a debt, the Trustee believes that a debtors schedules are inaccurate or fraudulent, or a debtor wishes to dispute the validity of a debt.  Just as in any other area of the law, the drafting of motions and pleadings is generally the responsibility of a paralegal.

Collecting documents from clients. Many bankruptcy attorneys ask their clients to bring in all of their bills, in order to ensure that the petition is accurate as far as the creditors’ names, addresses, and amounts owed, and the amounts spent on monthly expenses, such as electricity, gas, phone, internet, and cable services.

Corresponding with creditors. Once a bankruptcy attorney has accepted a client, he or she will advise the client to direct all communication with creditors to him or her. The attorney will usually assign the task of communicating with the creditors to a paralegal. Most often, creditors will call asking when the bankruptcy is expected to be filed and whether it will be a chapter 7 or a chapter 13.

Conducting Research. In some bankruptcy cases, research regarding the dischargeability of a debt or other issue regarding a debt may need to be conducted in order to answer a client’s questions or to make an argument in an adversary proceeding.

Scheduling appointments and hearings. Each bankruptcy case will require that the client and attorney attend at least one hearing, called a 341 hearing, or Meeting of the Creditors. Many Courts automatically schedule 341 hearings upon filing of a petition, and the attorney gets no say in when it is scheduled, as he or she does with most other types of hearings. A bankruptcy paralegal may be responsible for moving other hearings or client meetings in order to make sure that the attorney is free for each scheduled 341 hearing.

Tracking deadlines. There are many deadlines in a bankruptcy case, and missing any one of them can cause the petition to be dismissed. A large part of a bankruptcy paralegal’s job is to calendar and track these deadlines and ensure that each is met.

Becoming a Bankruptcy Paralegal or Petition Preparer

Bankruptcy Paralegals and Petition Preparers should have an eye for detail, the ability to work with numbers, basic math skills, excellent organizational skills, and the ability to track and meet deadlines. If this sounds like you and the skills and abilities you want to use in your paralegal career, you may want to consider becoming a bankruptcy paralegal or petition preparer.

If you are interested in preparing bankruptcy petitions for the public, you may want to start your own freelance Bankruptcy Petition Preparation service. You can use the forms provided by the US Bankruptcy Court in combination with a pdf service, such as PDFescape, that allows you to save and edit your completed schedules and exhibits, or you can purchase petition preparation software such as Best Case or Bankruptcy 2013. If you have never prepared a bankruptcy petition before, you may want to read the Court’s website for more information and instructions. The best place to start is the Bankruptcy Basics page. If you are still unsure about which forms, schedules, and exhibits you will need to complete, consider purchasing petition preparation software, which will sort out the forms for you, based on the information you enter. Many states cap the amount that a non-attorney bankruptcy petition preparer may charge for his or her services, so you will also want to check your state laws concerning fees and the maximum amount you may charge for petition preparation and related services.

If you would like to work for an attorney or law firm as a bankruptcy paralegal, you can gain relevant experience and skills in your current job, by asking to work on cases that involve finances, using basic math skills, completing standardized forms, creating budgets, corresponding with creditors, and using the federal CM/EFC and Pacer filing system. You may also want to download and learn how to use the free trial version of Best Case, the most popular bankruptcy petition preparation and filing software. You can then update your resume to reflect your new skills and abilities, and begin applying for open bankruptcy paralegal positions in your area or set up a freelance business completing bankruptcy petitions for attorneys from the convenience of your home.

About Shelley Riseden

Shelley M. Riseden is a freelance paralegal providing research, document preparation, and writing services to both attorneys and non-attorneys. She is an expert at conducting legal research and has a natural ability to grasp complex legal issues.Phone: 765.667.5139, E-mail: or, Skype: shelley.riseden, Yahoo: Virtually_Legal

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