Bankruptcy Petitions

March 17th, 2015 / By Deborah J. Merritt

Michael Sousa has written a thoughtful paper about the issue of non-lawyers preparing bankruptcy petitions for consumer debtors. As Sousa acknowledges, some of these preparers urge their clients to commit fraud; others serve their clients incompetently. But then again, the same is true of some bankruptcy lawyers–and the lawyers charge more than many consumers can afford.

After reviewing the field, Sousa proposes creation of a cadre of licensed petition preparers for no-asset Chapter 7 bankruptcy filings. The United States Trustee’s Office could regulate these practitioners, requiring them to demonstrate adequate knowledge of the law and adherence to appropriate ethical standards. The practitioners, however, would not need JD’s or law licenses.

Sousa’s proposal makes sense to me. I note it here because he has identified yet another area in which non-lawyers may be able to handle the law-related needs of clients who cannot afford an attorney’s fee. As Sousa details, the federal government already allows qualified non-lawyers to represent clients before the IRS, US Patent and Trademark Office, and (in immigration matters) the Department of Homeland Security. The transfer of law-related business to non-lawyers has been slow but steady.