The Truth about Bankruptcy Petition Preparers

A “bankruptcy petition preparer” under bankruptcy law (Section 110(a)(1) of the Bankruptcy Code) is someone who gets paid for preparing documents that are filed in a bankruptcy case, but is “not an attorney for the debtor” nor “an employee of such attorney under the direct supervision of such attorney.”

There are two basic reasons why a person would use a petition preparer:

  1. Price: If someone needs to be thinking about filing bankruptcy, most likely cash is very tight, and the person often has no idea how to possibly pay for an attorney. Petition preparers generally charge significantly less than attorneys, so that drive the decision.
  2. Lack of perceived need: If someone believes he or she needs to file bankruptcy, has put some effort into figuring out his or her options, may not believe he or she needs an attorney.

Letting Price Drive the Decision

Petition preparers are not legally allowed to be anything more than essentially data entry clerks. They input information that you provide onto bankruptcy documents. They are typists who type, and can’t do anything more. They are allowed to charge a reasonable price only for their very limited role. They can’t do much, which is why they charge relatively little. But because what they do is tangible, and they would enable you to get a bankruptcy petition filed at court, it can be tempting to use them.

What Essentials Are Lacking with a Petition Preparer

But a typist is a very small and least important part of what you need. Filing a bankruptcy is a serious matter, a significant decision. And within that big decision, there are many others to be made in each person’s situation, big decisions and small, even in seemingly straightforward cases. A petition preparer is neither qualified nor legally allowed to help you decide:

  • whether bankruptcy is the best option for you
  • what the best timing would be for you
  • the advantages and disadvantages of Chapter 7 and Chapter 13 (or possibly Chapter 11 or 12)
  • what assets will or will not be protected
  • which debts will or will not be written off
  • how to deal with creditors with collateral
  • and many other possible issues and decisions

And beyond these, the reality is that there are often unexpected and even seemingly logic-defying aspects of the law that can trip and trap you. It is simply very dangerous to try to cross that minefield without an experienced attorney to guide and represent you.

What is critical at this point in your financial life is for you to understand all your options clearly and thoroughly, so that can start making well-informed decisions starting now. If you live in Texas and in or around Rockwall, Heath, Greenville, Lavon, Wylie, Mesquite, or Rowlett, contact me, bankruptcy attorney Carrie Weir. I can help you with this. To set up a free initial consultation with me, please use the contact form here or by call me at 972-772-3083 . Thank you for the opportunity to help you.

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