Bankruptcy Law

Course Description

Bankruptcy Law examines the foundational principles and practical applications of debtor-creditor law and federal bankruptcy statutes. Students gain hands-on experience preparing financial schedules and statements for Chapter 7 and Chapter 13 filings, using the professional software commonly deployed in bankruptcy practice.

Within the SCNS taxonomy, PLA is the Paralegal prefix. Daytona State publishes this at 3 credits, offered spring, giving approximately 45 contact hours consistent with the entire published PLA family in this repository.

Bankruptcy is unusually good paralegal territory, and the reason is structural: it is form-driven, deadline-driven, and document-intensive, which means a competent paralegal does a very large share of the work. Bankruptcy practices frequently run on paralegal capacity, and the skills — schedule preparation, means test calculation, and software fluency — are directly and immediately employable.

Learning Outcomes

Required Outcomes

• Describe the purposes of bankruptcy law and the balance it strikes between debtor relief and creditor recovery.
• Describe the structure of the Bankruptcy Code and the chapters available to different debtors.
• Describe the bankruptcy court system and its relationship to the district courts.
• Describe the roles of the debtor, creditors, trustee, and United States Trustee.
• Describe non-bankruptcy debtor-creditor law, including collection, garnishment, liens, and foreclosure.
• Describe the automatic stay, its scope, its exceptions, and relief from it.
• Describe property of the estate and how it is determined.
• Apply exemption rules, including Florida's exemptions and the opt-out framework.
• Distinguish secured, priority, and general unsecured claims and describe their treatment.
• Describe Chapter 7 liquidation: eligibility, process, and outcomes.
• Describe Chapter 13 reorganization: eligibility, the plan, and confirmation.
• Describe Chapter 11 and Chapter 12 at an introductory level.
• Apply the means test and describe its effect on chapter eligibility.
• Conduct a client intake and gather the financial information a filing requires.
• Prepare bankruptcy petitions, schedules, and statements of financial affairs accurately.
• Use bankruptcy preparation software competently.
• Describe filing procedures, fees, and the credit counselling and debtor education requirements.
• Describe the meeting of creditors and prepare a client for it.
• Describe discharge, its scope, and non-dischargeable debts.
• Describe preferences, fraudulent transfers, and their consequences.
• Describe reaffirmation and redemption.
• Apply ethical requirements, including the unauthorized practice of law and debt relief agency rules.

Optional Outcomes

• Describe adversary proceedings and contested matters.
• Describe consumer protection statutes affecting collection practice.
• Describe student loan discharge standards.
• Describe business bankruptcy considerations.
• Describe creditor-side bankruptcy practice.
• Prepare a complete simulated filing as a capstone exercise.

Major Topics

Required Topics

• Purposes and history of bankruptcy law
• Structure of the Bankruptcy Code
• Bankruptcy courts and jurisdiction
• Parties: debtor, creditors, trustee, US Trustee
• Debtor-creditor law outside bankruptcy
• The automatic stay
• Property of the estate
• Exemptions and Florida's framework
• Classification of claims
• Chapter 7 liquidation
• Chapter 13 reorganization and the plan
• Chapters 11 and 12 overview
• The means test
• Client intake and information gathering
• Petitions, schedules, and statements
• Bankruptcy software
• Filing, fees, credit counselling, debtor education
• The § 341 meeting of creditors
• Discharge and non-dischargeable debts
• Preferences and fraudulent transfers
• Reaffirmation and redemption
• Ethics, UPL, and debt relief agency rules

Optional Topics

• Adversary proceedings
• Consumer protection and collection statutes
• Student loan discharge
• Business bankruptcy
• Creditor-side practice
• Simulated filing capstone

Resources & Tools

• Bankruptcy Law for Paralegals or Introduction to Bankruptcy Law (Buchbinder) — the standard texts for this course.
• The United States Bankruptcy Code (Title 11, U.S. Code) — free at uscode.house.gov and law.cornell.edu. Read the actual sections; the statute is the authority.
• Federal Rules of Bankruptcy Procedure and the Official Bankruptcy Forms — free at uscourts.gov. The official forms are what you will spend the course preparing.
• U.S. Bankruptcy Courts for the Middle and Northern Districts of Florida — free local rules, forms, and filing procedures; local rules vary and matter.
• U.S. Trustee Program (justice.gov/ust) — free: means test data, approved credit counselling and debtor education providers, and the census and IRS figures the means test uses.
• PACER — the federal court records system; many programmes provide training access, and it is how filings are actually searched.
• Chapter 222, Florida Statutes — free on Online Sunshine; Florida's exemption statutes, including the homestead provisions discussed below.
• Bankruptcy preparation software — Best Case, NextChapter, or similar; programmes normally provide access, and naming the one you used matters at interview.
• NALS, NFPA, and NALA — paralegal professional bodies with credentials and student membership.
• The Florida Bar — free guidance on the unauthorized practice of law, which is central here.

Career Pathways

• Bankruptcy paralegal — the direct destination, and a well-defined specialization that pays above general paralegal work.
• Consumer bankruptcy practice — small and mid-size firms, where paralegals carry substantial file responsibility.
• Creditors' rights and collections firms — the other side of the same practice.
• Bankruptcy trustee's office — Chapter 7 and Chapter 13 trustees employ administrative and paralegal staff.
• Corporate credit and collections — banks, credit unions, and finance companies employ staff who handle bankruptcy notices and claims.
• Mortgage servicing and default — a substantial Florida sector.
• Court clerk — the U.S. Bankruptcy Court clerk's offices.
• Legal aid and consumer advocacy — bankruptcy is core legal aid work.
• General litigation paralegal — the deadline management and document skills transfer directly.
• SOC code 23-2011 Paralegals and Legal Assistants. Note that Florida offers a voluntary Florida Registered Paralegal designation through The Florida Bar; bankruptcy filings also correlate with economic conditions, which makes this a somewhat counter-cyclical specialization.

Special Information

⚠ Florida's homestead exemption is unusually generous — and it is a central planning issue

The state-specific content that makes bankruptcy practice in Florida distinctive, and it is the first thing a Florida bankruptcy paralegal learns.

Florida's constitutional homestead exemption protects an unlimited value of equity in a debtor's homestead, subject to acreage limits — a defined maximum within a municipality and a larger allowance outside one. That is exceptional; most states cap homestead protection at a dollar figure. Florida also protects annuities, life insurance cash value, and certain retirement accounts unusually broadly under Chapter 222, Florida Statutes.

The consequences a paralegal must know:

• Florida has opted out of the federal exemption scheme. Debtors in Florida use the Florida exemptions, not the federal list — a distinction that governs how every schedule is prepared.
• Residency requirements apply. Federal law imposes a look-back period determining which state's exemptions a debtor may use, and a separate cap on homestead value for debtors who acquired the property within a defined period before filing. A recent arrival in Florida may not get the unlimited homestead, and establishing the timeline at intake is essential.
• The generosity attracts scrutiny. Converting non-exempt assets into exempt homestead equity shortly before filing can be attacked as a fraudulent transfer, and there is a specific statutory provision addressing it.
• Personal property exemptions in Florida are comparatively modest, including the vehicle exemption, and there is an alternative personal property allowance for debtors who do not claim homestead.
• Tenancy by the entireties is significant in Florida and affects how jointly held property is treated when only one spouse files.

Rule 11 applies with force. Exemption amounts, the means test figures, and the residency provisions are adjusted periodically — several bankruptcy dollar amounts are indexed and revised on a three-year cycle. Verify against the current statute and the current official forms, never against a textbook.

⚠ The unauthorized practice of law is the boundary — and bankruptcy has a specific trap

The professional limit that matters most, and bankruptcy is an area where the line is crossed more often than elsewhere because clients arrive in distress and the work is form-driven.

• A paralegal may not give legal advice. That includes advising which chapter to file, whether a debt is dischargeable, whether an asset is exempt, or whether to reaffirm. These feel like factual questions and they are legal conclusions.
• Preparing forms is permitted under attorney supervision; deciding what goes on them in a contested or judgement-dependent way is not.
• Never tell a client "you'll be fine" or "they can't take your house." Even when likely true, it is legal advice and it is relied upon.
• Federal law regulates "bankruptcy petition preparers" — non-attorneys who prepare documents for a fee — and imposes strict limits, disclosure requirements, and penalties. Petition preparers may not give legal advice at all, and the Bankruptcy Code specifies what they may not do. Working outside an attorney's supervision in this field is heavily constrained.
• Debt relief agency provisions impose disclosure and conduct requirements on those providing bankruptcy assistance to consumer debtors, and firms have compliance obligations that support staff implement.
• Florida enforces UPL actively through The Florida Bar, and it is a criminal matter under Chapter 454, Florida Statutes.

The script worth having ready: "I can't give legal advice, but I'll ask the attorney and get back to you today." Clients in financial crisis ask constantly, sympathetically, and urgently, which is exactly when the answer must still be no.

⚠ Accuracy in schedules is not clerical — the debtor signs under penalty of perjury

The reason this course grades precision so severely.

Bankruptcy schedules are signed under penalty of perjury, and the consequences of inaccuracy fall on the client:

• Omitted assets can result in denial of discharge, and concealment is a federal crime. An asset the client forgot is a problem the paralegal's intake should have caught.
• Omitted creditors may not be discharged, which defeats the purpose of filing for that debt.
• The trustee investigates. Trustees examine schedules against tax returns, pay records, property records, and the debtor's testimony at the meeting of creditors, and inconsistencies surface.
• Intake is where accuracy is built. A systematic intake — every account, every vehicle, every anticipated tax refund, every transfer in the look-back period, every lawsuit, every co-signed debt — prevents nearly all schedule problems.
• Ask about transfers explicitly. Clients routinely repay a family member or transfer a car before filing without understanding that preferences and fraudulent transfers can be recovered by the trustee, sometimes from the recipient. Catching this at intake changes the advice the attorney gives.
• Amendments are possible but costly in credibility and sometimes in fees; getting it right the first time is the professional standard.
• Deadlines are unforgiving. Schedules, the means test, credit counselling certificates, and debtor education all have deadlines, and missing one can result in dismissal.

The practical habit: build and use a comprehensive intake checklist, and go through it item by item rather than asking open questions. Clients do not know what is relevant, and it is not their job to.

⚠ These are people in crisis — the professional posture matters

Worth stating in a course about a practice area defined by financial failure.

Clients arriving at a bankruptcy office are frequently ashamed, frightened, and exhausted. Many have been receiving collection calls for months, some are facing foreclosure or garnishment, and most believe bankruptcy is a moral failure rather than a legal remedy.

• Bankruptcy is a lawful remedy with a constitutional foundation. Congress is empowered to establish uniform bankruptcy laws, and the discharge exists deliberately to permit a fresh start. Conveying that matter-of-factly helps clients disclose accurately.
• Shame produces omissions. A client embarrassed about a debt, a gambling loss, or money borrowed from a parent may not mention it — and that omission is the one that damages the case. Non-judgemental intake is a technical skill with a technical payoff.
• The causes are usually structural. Medical debt, job loss, divorce, and business failure account for most consumer filings, and a moralizing posture is both inaccurate and counterproductive.
• Confidentiality is absolute. Bankruptcy filings are public records, but what a client tells the office before and outside the filing is privileged and confidential.
• Do not make promises about outcomes. Reassurance that turns out to be wrong is worse than honest uncertainty, and it edges into legal advice.
• Manage your own exposure. This work involves sustained contact with people in distress, and secondary stress is real in consumer practice.

How Florida course levels affect transfer

The first digit of an SCNS number denotes the year of offering, not transferability. Courses at the 1000 and 2000 levels transfer transparently between Florida public institutions, and 3000 to 4000 is unproblematic since both are upper division. The boundary that actually matters is 2000 to 3000, where lower-division credit generally cannot satisfy an upper-division requirement.

PLA2460 is 3 credits and approximately 45 contact hours, matching the entire published PLA family in this repository. Expect hands-on document preparation — the catalog names it explicitly — using professional bankruptcy software, with a simulated filing as the substantial deliverable. Learn the software by name; naming Best Case or NextChapter at interview is a concrete signal.

The course transfers on the ordinary lower-division basis. Note that paralegal A.S. degrees are applied and do not carry the A.A.'s junior-status guarantee, and that ABA approval of a paralegal programme matters to some employers and to the Florida Registered Paralegal designation — confirm your programme's status if that pathway interests you.