Can a Paralegal Handle a Bankruptcy?
Yes, technically, a paralegal can handle a bankruptcy. A person can have anyone handle his or her legal issues, but that does not make it sensible or cost effective. The first obstacle to a paralegal providing effective legal representation is that a paralegal is not an attorney. Period. The paralegal may know something about bankruptcy law and its general procedures, but that individual does not have the education, training or expertise to provide the most complete representation possible.
Another, more important barrier to receiving the best possible representation at a bankruptcy hearing from a paralegal is that paralegals are prohibited by law from offering legal advice. This means that, at best, the paralegal is merely carrying out the directions of the person filing. It is still the filer’s responsibility to know the laws, regulations, and procedures. If a mistake is made, it is the one filing for bankruptcy who will suffer the consequences.
Bankruptcy Demands
Consider this starting point. There are six chapters available for filing a bankruptcy, with Chapter 7 and Chapter 13 being the most common types of filings. And most people can handle a simple Chapter 7 bankruptcy. But is Chapter 7 best one for a particular situation? Since a paralegal cannot offer any advice even on this fundamental level, the paralegal must allow the filer to make this decision, and choosing the wrong filing classification can be devastating. All the paralegal is permitted to do is carry out the instructions of the person filing.
Additionally, the rules, deadlines, exemptions, procedures, and required tasks are quite rigid and specific. Because a paralegal cannot provide legal advice, the individual filing must rely on his or her legal acumen. As an added measure, any mistakes made by the person filing are the responsibility of that person, and could result in a wide variety of penalties and punishments, including loss of property that could have been saved, or fines in the event of bankruptcy fraud.
The main reason most people do not hire an attorney to handle a bankruptcy is the problem of money. How to pay for that advice and assistance? Attorneys and the courts will work with the client to devise an equitable payment depending on the complexity of the case at hand. However, the risks of an individual relying on a paralegal to perform bankruptcy proceedings will, in all likelihood, have more severe financial consequences in the long run.