Should You Use a Bankruptcy Petition Preparer (BPP)?
When deciding whether to hire a Bankruptcy Petition Preparer (BPP), the most important thing to remember is that a BPP is not a lawyer and can’t provide any legal advice about your bankruptcy. To make this perfectly clear, federal bankruptcy law requires that BPPs give you a contract (Form B119) that includes all the things they’re not allowed to do and all the topics they can’t discuss. The form primarily covers anything that might be considered legal advice, including:
- whether you should file for bankruptcy
- which type of bankruptcy to file
- whether your bankruptcy case will be successful
- what kind of property you will or won’t get to keep
- whether to list certain items of property or how to describe your property, or
- whether you should promise to repay debts to any of your creditors.
That said, if you need the equivalent of clerical help with your forms, a bankruptcy petition preparer can produce the forms you need for a reasonable fee. A good BPP will have the necessary forms and software to do this job quickly and efficiently. But for legal information and advice, you must look elsewhere.
What Is a Bankruptcy Petition Preparer?
A bankruptcy petition preparer is a person or business—not a lawyer or someone who works for a lawyer—who you pay to prepare your bankruptcy documents. Following your specific directions, the BPP creates the bankruptcy forms that you will file in court. BPPs often use a bankruptcy software program to do this job.
What Rules Apply to Bankruptcy Petition Preparers?
Anyone can be a bankruptcy petition preparer, as long as they comply with the rules for BPPs set out in the federal bankruptcy code. These rules include:
- describing themselves as debt relief agencies providing services under the federal bankruptcy code
- not using the term “legal” or any term that might lead you to believe they are providing legal services
- charging reasonable fees (usually between $100 and $200)
- providing the contract mentioned above that describes their services and fees
- providing disclosure forms that summarize bankruptcy procedures
- including their name and tax ID number on all documents they prepare
- not collecting any bankruptcy court fees, and
- filing a disclosure with the court saying how much they charged you.
The rules apply only to professional BPPs. If a friend, for example, helps you fill out your papers, they don’t have to meet these requirements.
What to Know Before You Hire a Bankruptcy Petition Preparer
Before you hire a bankruptcy petition preparer, familiarize yourself with what they can and cannot do and be sure you have good sources for the legal help you need. If you use a BPP and not a lawyer, you must understand that you are representing yourself in bankruptcy court. You will be responsible for making all of the legal choices in your case and you must provide the BPP with complete and accurate information so they can properly complete your forms.
Here is a breakdown of what bankruptcy petition preparers are not allowed to do and where to find more about each topic in the book How to File for Chapter 7 Bankruptcy.
What BPPs Can't Do
(from Form B119) |
Plain English |
Where to Learn More in How to File for Chapter 7 Bankruptcy
|
I am forbidden
to offer you any legal advice, including advice about any of the following: |
|
The book won't give you specific advice, either, but it does discuss important facts to consider when making decisions. |
| • whether to file a petition under the Bankruptcy Code (11 U.S.C. § 101 et seq.); |
Whether you should file for bankruptcy |
Chapter 1 |
| • whether commencing a case under chapter 7, 11, 12, or 13 is appropriate; |
What kind of bankruptcy you should file for |
Chapter 1 |
| • whether your debts will be eliminated or discharged in a case under the Bankruptcy Code; |
Which debts you can eliminate |
Chapters 5 and 9 |
• whether you will be able to retain your home, car, or other property after commencing a case
under the Bankruptcy Code; |
Whether you'll lose your house, car, or other property |
Chapters 3, 4, and 5 |
| • concerning the tax consequences of a case brought under the Bankruptcy Code; |
how your taxes may be affected if you file for bankruptcy
|
Not covered |
| • concerning the dischargeability of tax claims; |
Whether or not your tax debts will be wiped out |
Chapter 9 |
• whether you may or should promise to repay debts to a creditor or enter into a reaffirmation
agreement with a creditor to reaffirm a debt; |
Which secured loans are worth keeping, versus other options, like surrenduring the property |
Chapter 5 |
| • concerning how to characterize the nature of your interests in property or your debts; or |
Whether property is exempt and which exemption category it belongs to |
Chapters 3 and 4 |
| • concerning bankruptcy procedures and rights. |
What happens in a bankruptcy case; what are your rights |
Covered throughout the book |
What is UpSolve, And How Does It Work?
What is UpSolve?
You may or may not have heard of UpSolve, but if your income is below the state median, and your bankruptcy is simple (and isn't about student loan debt), UpSolve may be able to help you file your bankruptcy paperwork with their free app.
The Upsolve "tool" guides you through the process of uploading your necessary information, and filling in the required forms, via an interview-based process like TurboTax, or WillMaker.
It was launched in Brooklyn by a couple of Harvard "social entrepreneurs", who would be called public interest lawyers, but one of them is not a lawyer... hence the moniker "civil rights entrepreneur."
I've met the founder, Rohan. He came up to Berkeley and introduced himself when he was at the Y-Combinator down in Stanford. He's a good guy.. He thanked me for blazing the "access to law" trail with Nolo — a trail which he has so aptly taken and continues to blaze in new directions. UpSolve has taken up the mantle that uncontested legal matters should not require a lawyer — an idea that was advocated back in the 1970's by Ralph Warner & Ed Sherman of the California do-it-yourself-law publisher Nolo Press, whom I joined in 1987 and worked with for 17 years (before getting restless and launching this site).
UpSolve is what is known as a Bankruptcy Petition Preparer (a BPP). That is, a service that can help prepare your bankruptcy petition, but can't give you advice along the way.
BPPs have been around for a long time. But UpSolve has automated the bankruptcy petition preparation process and made it free, thanks to nonprofit funding — and a business model that knows that a certain percentage of users won't qualify for their free tool, and are turned into paid leads, sold to local bankruptcy lawyers for free consultations.
In UpSolve's words..
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Although many of UpSolve’s informational articles are drafted or reviewed by attorneys, Upsolve is not a law firm or a substitute for an attorney or law firm. By using Upsolve, you do not enter any form of attorney-client relationship with Upsolve.
-
UpSolve provides an online web app that helps you file for bankruptcy for free on your own, if you have a simple case and pass their eligibility criteria. They do not provide any form of legal advice and absolutely no communication between you and Upsolve should be considered legal advice.
-
If you do not qualify for UpSolve's free web app, or you do not want to use it, they provide access to private independent attorneys at your specific direction. Attorneys pay Upsolve for the chance to provide free evaluations to people who ask for them.
UpSolve's revenue model generated more than $400,000 in lead based revenue from private attorneys, according to their 2021 partner letter.
Note: Selling leads to attorneys is the same way that LegalConsumer.com makes money. It's the way pretty much all free information services make money, by charging advertisers rather than users.
Who Qualifies for UpSolve's free app?
If you meet their criteria, UpSolve offers a service where you can upload your information and pay stubs and get back filled in schedules for you to submit to the court.
UpSolve can be.a handy tool for debtors who:
They'll also tell you who is going to be your trustee and give you a brief video of what to expect when you meet with the trustee at the 341 meeting.
It's still up to you to complete credit counseling, but they have some built in offers for that too.
Should you use it?
All in all, UpSolve does a decent job of automating the bankruptcy filing for those debtors who don't have real estate, and who owe the right kind of debt, and have income low enough to qualify for their free service.
