Paralegals in the Bankruptcy System

19th Senior Paralegal NCO Course

19th Senior Paralegal NCO Course (Photo credit: TJAGLCS)

Bankruptcy laws are derived from the Constitution of the United States which gave Congress the power to legislate them. Over the years, bankruptcy laws have evolved into numerous and complicated statutes that govern a wide variety of bankruptcy interests and concerns. A complete bankruptcy legal system has evolved right along with the laws. Included in the bankruptcy system is a multitude of professionals including lawyers, judges, clerks, and trustees, but probably the most under celebrated professional in the group is that of the paralegals.

According to the National Federation of Paralegal Associations, a paralegal or legal assistant, “is a person qualified through education, training or work experience to perform substantive legal work that requires knowledge of legal concepts and is customarily, but not exclusively, performed by a lawyer.”

In 1968, the American Bar Association established a standing committee on legal assistance for the purpose of “increasing the training and utilization of non-lawyer assistants to enable lawyers to discharge their professional responsibilities more effectively and efficiently.” The idea behind developing the paralegals training in specialty areas was to help speed up the process of getting legal matters done and to pass on savings to clients. The addition of these newly trained paralegals to the legal workforce has been highly successful and very productive.

In the bankruptcy system, paralegals normally gather data to prepare the bankruptcy petition and gather other documents that will help to finalize the bankruptcy process. Depending on their training, the work description of the bankruptcy paralegals has evolved through the years. Here are some of the current duties of bankruptcy paralegals:

  • interviewing the client for obtaining information in preparation for the filing of a petition and schedules;
  • confirming amounts owed to creditors;
  • identifying secured and unsecured creditors;
  • drafting and filing bankruptcy petitions, schedules and proof of claims;
  • checking UCC filings, real property, and taxes owed;
  • identifying exempt property;
  • maintaining contact with client and verifying information obtained regarding creditors;
  • drafting, serving, and filing complaints in adversary proceedings;
  • drafting correspondence to creditors, creditors attorneys, and bankruptcy representatives of the court;
  • preparing and pre-filing letters to creditors;
  • drafting attorney fee applications;
  • reviewing bankruptcy records to determine if specific individuals, companies or entities have prior bankruptcy cases;
  • and maintaining a log to check off discharge and status of bankruptcy.

Please note that although paralegals may not be certified lawyers who have passed the bar exam, they are specifically trained and experienced individuals that know how to perform their duties. There are many good paralegals who have years of experience in their job as a bankruptcy paralegal, regardless of the type of certification or training they have undergone to be where they are today. Bankruptcy lawyers rely on these individuals and their experience when you seek out their help in filing for bankruptcy protection. It is the paralegals that help to keep your costs down to a minimum in filing for bankruptcy protection. Therefore, it might be a good idea to ask to meet with both the bankruptcy attorney and any assistants before employing their help in filing your bankruptcy petition.

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