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. [more]
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
|• 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|