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What is bankruptcy software?
Bankruptcy software is a tool that law firms use to automate the processes of filing bankruptcy and meeting the court’s compliance standards. It speeds up the processes by automating data entry and legal calculations. The software also helps firms manage bankruptcy cases and file electronic petitions.
The key features of this software include forms automation, electronic filing, and forms library.
The benefits of bankruptcy software
- File petitions faster: Helps lawyers digitally file petitions for transfer to all the case management/electronic case file (CM/ECF) courts. Filing petitions directly to a court’s website reduces the turnaround time.
- Automate legal calculations: Automates calculations for means test, exemptions, commitment periods, and repayment plans. The software runs the means test, based on the case data, to find the chapter of bankruptcy. It also uses data such as, the median family income, to calculate the presumption of abuse and commitment period.
- Update bankruptcy rules automatically: Updates forms and rules automatically whenever the courts update forms and federal rules to simplify the legal process. These changes are consistent in all forms and include revised consensus and feature updates.
- Auto-populate legal data: Populates data automatically in the recurring fields. Details, such as debtor’s identity, jurisdiction-specific data, and case numbers, are auto-populated into forms and schedules.
Typical features of bankruptcy software
- Case management: Manage cases easily with the help of centralized document access and automated workflows.
- Legal forms library: Use pre-designed, industry-specific forms from the available library.
- Forms automation: Automate repetitive data entry and form creation.
- Electronic filing: Transmit documents digitally to the regulatory authorities.
- Calendar management: Create, manage, and share multiple calendars.
- Calculators: Calculate exemptions, repayment plans, and means tests.
Considerations when purchasing bankruptcy software
- Verifying the end user: Each bankruptcy solution has its target end users. Some licenses allow an attorney to file petitions, whereas others allow paralegals and virtual assistants to file under the attorney’s license. Some tools also include do-it-yourself (DIY) capabilities for private citizens that don’t offer process automation and may be irrelevant for lawyers. Therefore, verify each solution’s targeted users before purchase.
- Checking for compliance with relevant state laws: Each state has different asks, such as hardware requirements and specific laws, which the software needs to comply with. Therefore, ensure that your solution is compatible with the systems used in your district’s courts.
- Assessing post-filing forms: It’s important to consider the functionalities associated with post-filing forms such as “motions to convert” forms. Check whether the vendor’s predesigned forms and editing procedures suit your law firm’s requirements. Also, check if the post-filing forms offer all the functions you need.
Relevant bankruptcy software trends
- Machine learning to help firms predict bankruptcy: Studies suggest that machine learning (ML) could accurately predict the occurrence of bankruptcy two years before it happens. This can be done by feeding a large data set into an ML-based learning model for assessing the risk of bankruptcy. The technology makes predictions based on the connection between the financial metrics and risk of bankruptcy.
- AI to lead the way in bankruptcy investigation: Artificial intelligence (AI) is increasingly being used in complex bankruptcy investigations. It can easily sift through large amounts of structured and unstructured data such as the general ledger, emails, third-party data, social media data, and transaction data. This will make insolvency investigations more cost efficient, accurate, and sophisticated.