What Is Keeping Bankruptcy Professionals Up at Night? A Conversation with Weltman's Bankruptcy Leadership Team
By Director of National Bankruptcy Solutions Heather Schneider & Shareholder and Bankruptcy Group Chair Scott Fink
In an effort to provide clients with insights into emerging industry trends, Weltman is pleased to share a recent conversation between Scott Fink, Shareholder and Chair of the Bankruptcy Recovery Group, and Heather Schneider, Director of National Bankruptcy Solutions.
Together, Scott and Heather discuss the growing role of artificial intelligence (AI) in bankruptcy proceedings and its potential implications for creditors and the legal industry.
See their conversation below!
Heather: Artificial intelligence (AI) seems to be at the forefront of nearly every conversation today, both personally and professionally. Are you beginning to see AI influence the practice of bankruptcy law?
Scott: Absolutely, although not necessarily in the ways many of us initially expected. Within the creditors’ rights industry, there was an assumption that the early impact of AI would primarily involve large language models (LLMs) enhancing efficiencies in legal research and brief writing. While that is certainly evolving, the more immediate and noticeable impact we are seeing is on the debtor side.
Specifically, pro se debtors, individuals filing without legal representation, are increasingly using AI tools to navigate and prosecute their bankruptcy cases. More notably, we are seeing AI-assisted pleadings used to pursue sanctions and contempt actions against creditors with a level of sophistication that was previously uncommon among self-represented filers.
Heather: That is interesting. We have both observed an increase not only in pro se bankruptcy filings, but also in the complexity and quality of the pleadings being submitted. What do you believe this means for the creditors’ rights industry?
Scott: I think there are two significant implications. First, the increasing sophistication of motions and pleadings filed by pro se debtors means creditors and their counsel will likely need to devote additional time and resources to responding, which may ultimately increase legal costs.
Second, I believe AI has the potential to become a great equalizer by enabling more individuals to pursue bankruptcy protection without retaining counsel. While greater accessibility to legal information has benefits, it also changes the dynamic of creditor representation. We may increasingly find ourselves without experienced counsel on the opposing side to resolve matters efficiently, which can lead to more procedural complexity, longer case timelines, and increased costs for creditors.
Heather: Bankruptcy has always presented risk for creditors. As filings by AI-assisted pro se debtors continue to increase, it becomes even more important for creditors to have trusted professionals advising them on appropriate actions and strategies to protect their interests effectively.
Scott: I agree, and it will also be interesting to see how the courts react to all of this. Only time will tell.
Our team is constantly monitoring changes within the industry. If you have questions on this topic or would like to learn more about Weltman’s Bankruptcy Recovery Solutions, feel free to connect with Heather and/or Scott at any time.
This blog is not a solicitation for business, and it is not intended to constitute legal advice on specific matters, create an attorney-client relationship or be legally binding in any way.
