. . .and ohh what a mess do these folks create. Recently, a judge brought to my attention the success rates of pro se cases. They are dismal numbers. The likelihood of a pro se debtor completing a Chapter 13 case is close to zero. Chapter 7 cases have the potential to be much, much, much more complicated. They can also be straightforward. Who are you going to trust to determine what yours would be?
And that makes you a good paralegal, which is not the same thing as a good lawyer. But who does this lawyer work in the wild west where anyone can be a lawyer? In other words, if you were a lawyer now (no bar, no school), would you do this work that you currently don’t do? Because it seems to me that you’re ackowledging it’s above your pay-grade, so to speak. What changes if we were to start calling you a lawyer?
Is your skill and quality and attentiveness guaranteed by the threat of professional sanctions? Is your skill and quality and attentiveness guaranteed by a heightened definition of professional (and not just ordinary) negligence? No.
It’s a cold comfort to Mr. Smith when his bankruptcy is irretrievably messed up by a careless “non-lawyer practitioner” that he can ruin your reputation by word-of-mouth.
who, according to case law, is to be no more than a typist.
I think we agree, here. (BTW, I am a lawyer, so yes to your questions)
Absolutely - everything is available to do it pro se. But, most, if not all, of the pro se Debtors I see on a regular basis have no idea what they’re doing. BK law seems very logical to me, but to most, it seems crazy. Providing a middle option would be more time and money efficient for the Debtor, the Trustee and the Creditors.
For example - a Debtor files pro se, and has no idea that their tax refund would be subject to administration by the Trustee to Creditors. February rolls around, they get their refund, spend it, and then the Trustee files an adversary against them, which creates a new, non-dischargable debt. The Trustee gets the judgment, then garnishes a paycheck to collect it. The Creditors get a percentage of what’s collected, but it’s diminished by the administrative costs incurred by the Trustee, because the refund was spent.
But, if a Debtor pays a paralegal to file, the paralegal points out that the refund is the most common asset of a bankruptcy estate, and then goes through options for the refund - say, not filing until after it is spent, changing income tax deductions to lower the amount of the refund, etc. Tax refund issue is taken care of, Debtor files a no asset case, and a fresh start is achieved.
Huge savings to all parties in money and time - the Debtor pays $300 instead of $1200 to save their tax refund and the Trustee isn’t forced to spend time and money collecting the refund.
whups, for some reason thought that was “Sateryn76” writing that 
I think you misunderstand me - I am totally fine with law schools and JDs and bar exams. I just think that they should be open to competition.
Um, they want to spend the time and money collecting the refund.
And I don’t know how it’s more efficient when you, admittedly, have to farm out complex questions to an attorney - when the attorney could just handle it ab initio.
Schedule B explicitly lists tax refunds as property that needs to be disclosed. Furthermore, at the meeting of creditors, the Trustee should ask the debtor about the refund and tell him not to spend it. If the debtor is not going to read the schedules he signs under penalty of perjury or listen to the trustee, what makes you think he will listen to a paralegal?
Finally, you offer two solutions to this tax refund dilemma, solutions that constitute both legal and tax advice*, all the while ignoring the most obvious - exempt the refund.
*As a lawyer, I would never contemplate advising a debtor to adjust their tax withholding without first consulting a tax professional. That you would, tells me alot.
Seriously, at good, BIGLAW firms where I started, you (Sateryn76) would be worth your weight in gold. When I opened my side business, I had the grand scheme of hiring out a bunch of paralegals to do the grunt work, and I would just review their work. This worked out in the short term. But, I couldn’t compete with the wages that BIGLAW paid. The only thing I could offer was quality of life, but someone still had to manage the client relationship and set client expectations (again, a lawyer’s job, and possibly to be blamed on the bar, but as stated upthread, it’s for the Client’s protection). There was no way I could manage all that and still keep my day job.
So, when I started lowering my offers, people wouldn’t accept, no matter how much I let them work from home. They always found better pay elsewhere. I defintely couldn’t afford to pay for experience, so I had to expend my time training new grads. But, when word gets out that other firms are paying better, my paralegals leave. Turnover, even year after year, can be a major problem. Sadly, the ones that are willing to accept my pay scale and commit to a long term contract are really not worth hiring anyway. I suppose I could take less profit, but then it doesn’t become worth my risk. I guess I’ll just keep the revolving door of law clerks and paralegals going.
They are. There are literally hundreds of ABA acredited law schools.
No doubt. Our paralegals can earn in the six-figures. And they know what consitutues practicing law - and they avoid it.
Sure, absolutely - but it happens all the time that Debtors pay $1200 for a lawyer that doesn’t explain what those disclosures and warnings actually mean, prior to filing.
Your slam against me is unfounded - I would explain how lowering withholding would lower the available asset, and advise them to talk to their accountant. Which, really, is laughable, since their accountant is usually H&R Block, but I would be covered, just as you would.
And, in my district, the intangible property exemption tops out at $600 jointly, and that includes all other intangible property.
No - pursuant to procedure, the Trustee should normally collect the refund by demanding it from the IRS. But, if the money is spent by the Debtor, the Trustee has to initiate lawsuits, perfect service, secure a judgment and collect it. Scads and scads of time and money are wasted.
The more time he spends doing that stuff, the more he takes from the bk estate.
Right - which lowers the percentages paid to creditors, which is the whole point of the appointment of a Trustee.
but it’s not money efficient to a Trustee.
And the lawyers who put the debtors in bad spots get disciplined. I used to see it all of the time. Unfortunately, consumer bankruptcy is rife with shitty lawyers. I don’t think the solution is to let even more unqualfied people in.
BTW, it wasn’t meant to be a slam. It was meant to show that there are some things you might not being considering. What happens when they stop witholding altogether and owe the IRS a couple of grand? Who is not going to be willing to pay for a lawyer, but willing to pay for tax advice? Does H&R Block even offer this sort of advice?
FWIW, exemptions don’t change district to distrcit. To the extent the exemptions laws vary, its at a state level. Some states opt in to the federal exemption scheme set forth in the Code. What’s you state? My bet is you have a wild-card exemption, too.
Let’s just pretend you are the exception: the non-licensed practioner who knows when she’s in over her head and hands it off even though the law doesn’t require her to do so. Can you still see how it would be bad policy to allow you to provide legal advice when there is no measure in place to prevent you from holding on to something you have no business handling?
Right. And he’s not going to spend $5,000, or even $1,200, in time chasing a $1,200 refund because the US Trustee and the court will nail him.