Paralegals can often save you money. I occasionally refer potential clients to a trusted paralegal rather than charge these potential clients my normal hourly rate. Paralegals are (hopefully) licensed document preparers, and some are very qualified. Sometimes, though, they can make matters worse, either through ignorance or through well intentioned but inaccurate advice. I have had occasion to fix more than one mess created by a well intentioned non-lawyer who thought he or she could manage without an attorney’s assistance. It is rarely a pretty situation by the time it gets to me.
As a matter of State and Federal law, paralegals and document preparers cannot do certain things. If they do, or if they tell you they can do, any of the things listed below, they are breaking the law.
Bankruptcy paralegals must give you the following disclosure:
Before preparing any document for filing as defined in § 110(a)(2) of the Bankruptcy Code or accepting any fees, I am required by law to provide you with this notice concerning bankruptcy petition preparers. Under the law, § 110 of the Bankruptcy Code (11 U.S.C. § 110), I am forbidden to offer you any legal advice, including advice about any of the following:
• whether to file a petition under the Bankruptcy Code (11 U.S.C. § 101 et seq.);
• whether commencing a case under chapter 7, 11, 12, or 13 is appropriate;
• whether your debts will be eliminated or discharged in a case under the Bankruptcy Code;
• whether you will be able to retain your home, car, or other property after commencing a caseunder the Bankruptcy Code;
• the tax consequences of a case brought under the Bankruptcy Code;
• the dischargeability of tax claims;
• whether you may or should promise to repay debts to a creditor or enter into a reaffirmation agreement with a creditor to reaffirm a debt;
• how to characterize the nature of your interests in property or your debts; or
• bankruptcy procedures and rights.
If you speak to a paralegal about bankruptcy, and they do not provide the above disclosure or if they otherwise violate the law (by telling you what will or won’t be discharged, for example) they are risking their own up-close-and-personal meeting with a judge which can result in a fine or even prison time, and potentially setting you up for failure.
Simply put, non-attorneys are prohibited from offering legal advice of any kind (even non-bankruptcy legal advice), and they risk losing their livelihood if they do. Even if they know the answer, they cannot advise you on a legal matter. Only an attorney can do that.
Do it right the first time; use a trained professional who can give you good advice without violating the law.