Bankruptcy Petition Preparers are non-lawyers paid by consumers to prepare bankruptcy documents, for filing in court.
Anyone can be a BPP, provided they comply with therules governing BPP practice contained in the bankruptcy code.
Customers who use a BPP are representing themselves in the bankruptcy court. This means they are responsible for making the choices required of them in their case. They must also provide the BPP with complete and accurate information to be entered in the documents.
Because BPPs are not lawyers, their customers must obtain necessary legal information and advice from an independent source such as a self-help law book or a lawyer.
Rules for Bankruptcy Petition Preparer Practice
As a debt relief agency, you are liable to your customers if you are negligent in performing the services required by the bankruptcy law or other services you have agreed to provide.
Specific Bankruptcy Petition Preparer Requirements:
As a BPP you must:
• sign and print your name, address and social security number on documents you prepare (the official bankruptcy documents provide spaces for this information)
• provide your customers with an official notice explaining that you are not an attorney and can’t practice law or provide legal advice
• provide your customers with copies of the documents to be filed, and
• file an official document with the bankruptcy court disclosing your fees.
The new law specifically prohibits BPPs from:
1) providing customers with information or advice about bankruptcy, including:
• Whether to file bankruptcy
• What type of bankruptcy to file
• What debts will be cancelled
• What property can be retained
• Tax consequences of filing bankruptcy
• Whether tax claims can be cancelled
• About repayment options
• About the nature of the customer’s debts, and
• About bankruptcy procedures and rights.
2) using the word “legal” (or any similar term including “paralegal”) in advertising
3) advertising under any category that includes the word legal (or any similar term)
4) handling customers’ bankruptcy court filing fees
5) charging a fee higher than the maximum allowed by the court in which the documents will be filed.
6) advising a customer to exclude assets or income that must be included on applicable forms
7) advising a customer to use a false Social Security account number
8) failing to inform a customer that he or she is filing for bankruptcy relief, or
9) preparing a document for filing in a manner that fails to disclose your identity
With the training and materials offered by the Bankrutpcy Law Project, there should be no reason to violate any of these rules. But if there are violations, stiff fines may result, and repeated violations or fraudulent acts may result in a loss of your right to engage in BPP practice.