There are two primary, yet very different approaches to working in the field of drafting bankruptcy petitions:
- Drafting bankruptcy petitions for attorneys representing clients in a bankruptcy filing
- Drafting bankruptcy petitions for people filing bankruptcy without an attorney
There are a few names that are typically used in the industry to describe those that draft bankruptcy petitions for attorneys, which includes:
- Bankruptcy Assistant
- Virtual Bankruptcy Assistant (VBA)
- Bankruptcy Petition Specialist™ (our trademarked name for this)
For the purposes of this article, we will use the acronym “VBA”.
On the other hand, those who draft bankruptcy petitions for people filing bankruptcy without an attorney are known as a
- Bankruptcy Petition Preparer (BPP).
A VBA only drafts bankruptcy petitions under the direction of an attorney. The VBA drafts Chapter 7 bankruptcy petitions for the attorney’s clients, which the attorney reviews and requests updates or changes before it is filed with the court. The attorney representing the clients accept responsibility for the contents of the petition.
WHAT IS UNAUTHORIZED PRACTICE OF LAW (UPL)?
Only a licensed attorney can give legal advice, so neither VBA’s nor BPP’s can give legal advice. Doing so is called Unauthorized Practice of Law (UPL), and is illegal.
BPP’s AND THE DANGER OF COMMITTING UPL VIOLATIONS
Because BPPs are drafting bankruptcy petitions for the client filing bankruptcy without an attorney, naturally the client will have many questions about their case, and without an attorney to answer them, these questions will be posed to the BPP, which puts them at risk of committing UPL, since there is no attorney involved to answer the questions.
Unfortunately, because BPPS serve the general public and are often asked legal questions by the public while they prepare their bankruptcy petition (e.g., which exemptions to choose), some BPPs wind up providing legal advice and practicing Unauthorized Practice of Law (UPL).
To avoid the danger of committing UPL, a BPP must only answer the client’s legal questions with “I’m not an attorney”, leaving the debtors without any answers to their important questions that could make or break their bankruptcy and their financial future.
A VBA, on the other hand, can simply say, “That’s a great question. I’ll pass it along to the attorney who can answer that for you.”.
WHY PEOPLE HIRE A BPP (AND THE UNFORTUNATE DOWNSIDE)
People hire a BPP because they believe that not paying an attorney for their assistance through bankruptcy will save them money.
The sad reality is that families have lost their homes and other belongings because they attempted to save money by not hiring a qualified bankruptcy attorney who is knowledgeable about bankruptcy law and how to best serve their clients under the law.
When someone hires a BPP, the client can’t even get advice on whether they should be filing Chapter 7 or Chapter 13 bankruptcy!
There are far too many intricate details and potential problems to file bankruptcy without an attorney. In addition, each case is different; each case has its own "problem," and a highly skilled bankruptcy attorney is the best person to resolve any issues that arise.
One example of this is two of the most crucial forms in the bankruptcy petition…the Means Test and Schedule C.
The Means Test is used to determine whether the debtors have the “means” to pay back some or all of their debt, and Schedule C allows for exempting certain property from being at risk of loss (liquidated to pay debt), as people really do need to have certain things to be able to survive.
While anyone can learn to skillfully draft bankruptcy petitions, including the Means Test and Schedule C, there are legal decisions that need to be made to complete these two forms. When working under the direction of an attorney as a VBA, it’s very easy to get the legal questions addressed, whereas the BPP will have to ask the client what they want to do, and they likely will not have the legal knowledge and understanding necessary to make a good decision, which could prove to be disastrous in the end.
Furthermore, you should be aware that the amount of money that a non-attorney can charge to draft bankruptcy petitions for the general public is capped or limited in many states. For the same amount of labor, would you prefer to be paid $75 to $200 per bankruptcy petition working for the general public or $350-$700+ per petition working for an attorney? You should get paid what the job is worth!
Even if the states you draft petitions for don’t have fee caps for BPP’s preparing petitions for the general public, working as a VBA drafting petitions for attorneys will allow you to earn more money by offering other services that attorneys need (e.g., electronically filing the petition with the court).
Working as a VBA also has the major benefit of dramatically reducing or even eliminating your marketing expense. To get a few lawyers to send you a combined total of 20 bankruptcy petitions per month (or whatever your goal is) can be accomplished with a little initial marketing, and then the work keeps coming, and you can devote all of your time to drafting the steady stream of petitions that arrive in your work queue.
On the other hand, a BPP has to replace last month’s 20 clients with 20 new clients this month. That’s a lot of marketing effort and expense that is unnecessary when working for attorneys who already have the steady flow of clients.
SUMMARY
A Virtual Bankruptcy Assistant (VBA) is a valuable asset to law firms by drafting Chapter 7 and Chapter 13 bankruptcy petitions for their client cases. All work is performed under the direction of the attorney, who makes all legal decisions related to the bankruptcy from start to finish.
A Bankruptcy Petition Preparer (BPP) drafts bankruptcy petitions for the general public, who are filing for bankruptcy on their own, without the assistance or legal counsel of an attorney who can help them to safeguard their assets during the bankruptcy process. Unfortunately, this can lead to cases being dismissed or not receiving enough protection under the bankruptcy law, which means that they lose some or all of the benefits of filing for bankruptcy protection in the first place.
Disclaimer
713 Training representatives are not attorneys.
All information and training provided by 713 Training, regardless of the form it was provided, is for educational purposes only, is not legal advice, and is not intended to take the place of legal advice from a competent licensed attorney.
Neither the author or publisher of information provided by 713 Training assume any liability resulting from the use or misuse of information provided. The recipient of any information provided bears sole responsible for the use of any and all information provided.
Under no circumstances will any legal responsibility or liability be held against the author or publisher for any reparation, damages, or monetary loss due to the information provided, either directly or indirectly.
713 Training encourages that you seek competent legal advice from a licensed attorney before applying information, regardless of the source.
Who We Are
713 Training is your premier one-stop solution for bankruptcy petition training, for drafting the most highly-detailed, accurate and professional Chapter 7 and Chapter 13 bankruptcy petitions that trustees love!
We provide bankruptcy petition training to legal assistants, paralegals, virtual bankruptcy assistants (VBAs), bankruptcy petition preparers (BPPs), bankruptcy attorneys and law firms.
Contact Us today to discuss your goals, and how we can help you start or grow your legal career.
Ready to start earning income drafting bankruptcy petitions from home? See our online bankruptcy petition training courses at www.713training.com. You can also join our online community at www.navba.org.
Understanding the distinction between a certified bankruptcy assistant and other legal support roles is essential for law firms seeking qualified petition preparation professionals.