People who work around bankruptcy, including paralegals, legal assistants, Virtual Bankruptcy Assistants and bankruptcy petition preparers, all get asked the same questions by debtors. Most of them are not questions an assistant can answer. Understanding why is the best protection a non-attorney assistant has, and a useful check for the attorney supervising them.
The basic rule
Only a licensed attorney can give legal advice. For everyone else, giving it is the unauthorized practice of law. That is true whether the assistant works inside a firm, as an independent contractor, or as a bankruptcy petition preparer under Section 110 of the Bankruptcy Code. The specifics of what counts as practicing law vary by state, so a general article cannot settle them for your jurisdiction. The principle, however, is consistent.
Things that are generally on the assistant's side of the line
- Gathering information and documents from the client and organizing them.
- Entering that information accurately into the petition, schedules and statement of financial affairs, working from what the client and the documents say.
- Research that is factual: PACER searches, property and vehicle valuations, judgment and general debtor searches.
- Administrative and clerical tasks, such as notifying clients of their meeting of creditors, collecting post-petition documents and preparing amendments the attorney or trustee has directed.
- Preparing drafts of filings for the attorney to review, change and approve.
Things that belong to the attorney
- Advising a debtor whether to file, and under which chapter.
- Choosing which exemptions to claim or how to treat a particular asset or debt.
- Explaining the legal consequences of filing, of reaffirming a debt or of surrendering property.
- Deciding how to answer an ambiguous question on a form, where the answer carries a legal consequence.
- Final review, signature and filing.
The hard part: the question always gets asked
A debtor trusts the person who is helping with the paperwork. They ask: "Should I file Chapter 7 or 13?" "Will I lose my house?" "Which of these can I keep?" The pressure to answer is real, and it is the place where well-meaning assistants cross the line.
The cleanest response is simple: that is a question for your attorney. Assistants who work under an attorney's direction can say it and mean it, because the debtor's attorney is a call away. That is one reason NAVBA only advocates working under the direction of a licensed attorney, and why the NAVBA Code of Ethics commits members to supporting attorneys rather than working directly for the public, and to referring prospective clients to licensed bankruptcy attorneys.
Software makes the line easy to blur
Bankruptcy software often auto-selects an exemption for each item of property. It is tempting to accept the default. It may be perfectly reasonable, but it is not always the best option available, and local rules can offer better protection. The assistant can enter what the software suggests, or draft a selection, and send it to the attorney for review. The attorney then makes the call. That is the difference between preparing a document and deciding a legal question.
If you are an attorney
Your obligations do not stop at the door when work is done remotely. Review the work, supervise it, and make sure the assistant knows where to send questions. For practical guidance, see how to supervise a remote bankruptcy assistant, and for the difference between this model and a statutory petition preparer, bankruptcy petition preparer vs. Virtual Bankruptcy Assistant.
If you are an assistant
When in doubt, refer the question to an attorney and write down what you did. Nobody is ever criticized for asking an attorney a question they should have asked. If you are considering this work as a career, you can learn more about joining NAVBA.
This article is general information about bankruptcy practice, not legal advice. Local rules, trustee preferences and state law vary, so confirm current requirements for your jurisdiction.
