Exploring the Path to Become a Bankruptcy Paralegal

A bankruptcy paralegal has a critical role in the legal field. When a client comes to a law office for a bankruptcy consultation, the paralegal is the one who does most of the paperwork. The attorney is the only one who can give the client legal advice and appear in court. The paralegal will help the client complete the paperwork, interview any creditors, and explain some of the bankruptcy law to the client.

Whether you are already a paralegal looking to expand your knowledge base, or just starting in paralegal studies, bankruptcy paralegals are in demand throughout the profession. We’ll review what bankruptcy paralegals do and how to get started in this growing career.

What is a Bankruptcy Paralegal?

A bankruptcy paralegal is a paralegal with expertise in bankruptcy law. Paralegals knowledgeable in bankruptcy law must be able to assist their attorneys in this specialized area of law. Bankruptcy attorneys are certified to practice in this field, so they need someone equally skilled in this niche area.

Bankruptcy is governed by federal statute, so it differs from the state laws usually taught in paralegal courses. Litigation paralegals usually know the state laws and court rules for their region. A bankruptcy paralegal needs to know federal rules of filing and laws of federal courts.

Key Responsibilities of a Bankruptcy Paralegal

The job description of a bankruptcy paralegal is not much different from that of a litigation paralegal, but the specific duties are different. Bankruptcy proceedings are very paperwork-intensive, and all documents must be completed according to federal rules and state guidelines. For instance, federal rules allow each state to make its own laws about what assets are exempt in a bankruptcy. Paralegals must know or be able to find out these details.

A bankruptcy paralegal’s duties include:

• • Preparing bankruptcy documents for the client’s and attorney’s signature
• • Conducting legal research on debtors and creditors
• • Complete the bankruptcy petition and file
• • Prepare and file motions and pleadings under the attorney’s signature

Paralegals considering a bankruptcy specialization should consider an accounting degree or coursework in accounting or finance, since the job is very math-heavy.

Required Skills and Qualifications

A bankruptcy paralegal is a paralegal specialist. A good paralegal can succeed anywhere, but a bankruptcy paralegal needs more than just skill and experience. You need knowledge of federal bankruptcy law and your state’s specific bankruptcy laws.

Having a certification in bankruptcy law like the one offered by the Association of Bankruptcy Judicial Assistants (ABJA) can boost your resume and give you some additional understanding of the bankruptcy process.

Other important skills needed for a bankruptcy paralegal include:

• • Knowledge of legal documents such as a Notice of Filing, Voluntary Petition, and Application for Fee Waiver.
• • Docket management and calendaring. Once the paperwork is filed, most of a bankruptcy case is waiting. However, the client cannot miss the Creditor’s Hearing. The hearing may be set 30-60 days ahead, and both the client and the attorney will have other things planned.
• • Paralegal certificate or certification.
• • Good communication skills. Bankruptcy documents are very complicated and detailed, and they must include copies of many other documents. Clients are understandably nervous and often disorganized, which may manifest as anger and frustration. The paralegals’ job is to keep the client on track and get everything in order.
• • Detail oriented and good organization. All those documents must be filed in the right sequence and the right way. Although software programs have made filing easier, if the numbers aren’t entered correctly, even the best program won’t work.

There are many bankruptcy case management programs on the market today. Whichever one the law firm or attorney uses, paralegals should take time to learn it thoroughly. Most systems have online training courses to help learn unfamiliar programs.

Attorneys need someone who knows the practice area and can hand them a bankruptcy petition complete and ready the day of the hearing. That means you need to be on top of your game every day.

Educational Path and Certification

Paralegal studies courses and classes are available at colleges and online. The American Bar Association has a list of ABA-approved schools where you can receive a paralegal certificate or degree. Many of these schools offer advanced certificates and specializations, including bankruptcy, such as the one offered by the Center for Legal Studies.

When obtaining a paralegal specialization, students should understand some key definitions.

• •  A certification is evidence of passing an examination or meeting professional standards. The Association of Bankruptcy Judicial Assistants (ABJA) has a Certified Bankruptcy Program which gives a certification in bankruptcy writing.
• • A certificate is proof of completing an educational course, usually less stringent than obtaining a degree. Many online colleges and organizations offer certificates. One example is UCLA’s Extension Program.
• • A license is proof of passing a state-level educational course, like a certificate, but required by the state or sometimes the county or federal government. California has such a requirement, and it is provided by some online schools like the Center for Advanced Legal Studies.
• • A degree is issued by an accredited college or university. It may be a two- or four-year degree and usually requires a progression of courses and general education. National University has an online paralegal bachelor’s degree that is a four-year degree.

A paralegal certificate is your starting point; a bankruptcy certification shows employers you have taken advanced training to improve your employability.

Gaining Experience and Finding Jobs

In general, gaining experience in paralegal work is by finding internships or taking entry-level jobs in law firms that focus on the area you’re interested in. Even if you don’t have your bankruptcy paralegal certification yet, you can get experience as a paralegal or legal assistant in a bankruptcy law firm. Much of the work can be learned on the job or with the mentorship of senior paralegals.

One way to find these entry-level bankruptcy paralegal jobs is through job search sites like indeed.com or ziprecruiter.com. Enter “bankruptcy paralegal” and begin with the positions that match your skill set. If you’re looking for a job outside your current experience level, don’t be afraid to take a job below your pay grade. Tell the interviewer that you’re trying to improve your knowledge base.

Networking through professional organizations is another way to find jobs and internships. These groups can help you find more education and certification programs.

• National Association for Legal Support Professionals

• American Association for Paralegal Education

• American Alliance of Paralegals

• National Association of Legal Assistants

Career Advancement and Salary Expectations

Overall, the paralegal field has a good job outlook. However, many people are “paralegals.” To stand out in a field full of certified paralegals, you need a specialization like bankruptcy. Certification through professional organizations helps demonstrate your commitment to professional growth since most require continuing legal education (CLE) and regular testing and updates.

The median annual wage for paralegals in the United States is about $56,000. Specialists can command much higher salaries, and senior paralegals can earn six figures. Bankruptcy paralegals average $90,000. Most bankruptcy specialists recommend a two- or four-year degree to achieve this pay grade, and as already noted, some background in finance is ideal.

The Bankruptcy Process and the Role of a Paralegal

The bankruptcy process begins when a debtor realizes that their debt burden is greater than their ability to pay and that their total assets are not sufficient to pay off all their creditors. They usually approach a bankruptcy attorney and ask for help filing bankruptcy.

Deadlines and paperwork govern Chapter 7 (the one most individuals file). A paralegal’s primary duties are keeping up with the paperwork and reminding the client to meet court-ordered deadlines. Missing any deadlines can put the bankruptcy into default.

• • Before filing, the client must attend a mandatory credit counseling course. The petition cannot be filed until the course is complete. Setting up and reminding the client to finish the course is part of the paralegal’s duties and requires good communication skills.
• • Filing all the forms comes next. The client must list all property and creditors, plus all transactions for the previous two to five years (depending on the state). These forms must be completed before filing.
• • All documents go to the court trustee, plus any other documents requested.
• • About 30 days later, the creditor’s meeting is scheduled. This is the only meeting the client must attend and cannot be missed. Ensuring the client (and the attorney) are at this meeting is essential.
• • Within 60 days, the client must attend a budget counseling meeting by phone or online. It’s best if the paralegal sets this up as well.
• • Discharge takes 60-75 days. During this period, the paralegal’s job is to handle any creditor’s objections, stay in touch with the trustee, and ensure the client does not sell any property without notifying the attorney or trustee.

A bankruptcy paralegal’s job is one part paperwork management, one part-time management, and one part counselor. You must be accurate, fast, and patient with your attorney and the client.

Common Challenges and Opportunities in the Role

Along with the usual stresses of being a paralegal, bankruptcy paralegals deal with complex federal and state laws. You’ll need to cope with:

• Long hours and tight deadlines. If the creditor’s meeting is on Friday, the paperwork must be filed by Thursday, which may mean working till midnight.

• Conflicting laws. Federal bankruptcy laws control, but state laws may conflict with what the federal rules say. You’ll have to explain to clients (and even your attorney!) what exempt property is, what filing deadlines are, and why things differ in different jurisdictions.

• Fluctuating caseloads. Some law firms say the time of year does not affect bankruptcy filings; others say the second quarter is more common because people use their tax returns to pay legal fees. In either case, your caseload may rise and fall, alternating dead periods with more than you can handle. Be prepared for both.

There are also great opportunities for growth and professional development. The field evolves, so you must stay current with your legal education. You can continue to add certifications and specializations to your portfolio if you want to branch out from bankruptcy to other areas of law.

Conclusion

A career as a bankruptcy paralegal is a great move forward if you’re already a paralegal or legal assistant. It can be as easy as getting an additional certificate or certification. If you’re just considering starting your legal career, take some time and get advice from someone in the paralegal field.

Consider a two- or four-year degree in paralegal studies or even finance with a legal studies specialization if you’re interested in making bankruptcy law your field of choice. This area requires accounting skills and legal knowledge, and you should take advantage of all your abilities when beginning your career.

Sources:

• https://www.velents.com/job-descriptions/bankruptcy-paralegal/

• https://www.abja.org/content/certified-bankruptcy-assistant-program

• https://www.nals.org/page/USDEPlabor

• https://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics

• https://www.ziprecruiter.com/career/Bankruptcy-Paralegal/Resume-Keywords-and-Skills

• https://www.americanbar.org/groups/paralegals/profession-information/educational-information-for-paralegals/

• https://www.spencerreed.com/blog/tips-landing-paralegal-job-placement

• https://www.bosstaff.com/2022/03/15/what-is-the-career-path-for-paralegals/

• https://legalcareerpath.com/highest-paying-paralegal-jobs/

• https://www.nolo.com/legal-encyclopedia/free-books/foreclosure-book/chapter6-5.html