What exactly is a Bankruptcy Petition Preparer?

Bankruptcy petition preparers are also known as the “typing services” or “paralegals.” They could be any person or any business entity that can help the consumer type, fill out, or file bankruptcy papers for a fee. A bankruptcy petition preparer or a BPP can be an individual that works for a lawyer, but is not a lawyer, he/she according to the law, is also somebody that is supposed to be under the direct supervision of the consumer, and not under the supervision of a lawyer (11 U.S.C. 110a).


What can’t the BPP do?

According to 11 U.S.C. 110(e) (2):

• BPPs are not allowed to give the consumer any legal advice and they may not represent the consumer in the court trial.

• They may not advise the consumer on which chapter to file.

• They may not comment on which debts are going to be discharged in the case which they are under.

• They may not comment on which properties, the consumer’s home, car, or any other, that would be saved post-discharge.

• They may not comment on taxes consequences and claims.

• They may not counsel the consumer on whether or not he/she should promise repayment to a creditor or enter into a reaffirmation agreement instead.

• They may not give the consumers a briefing on the nature of their interests in the property or their debts (list of assets, debts, and exemptions) and they also may not orient them concerning bankruptcy procedures and rights.

They can’t even use the word “legal” or any word pertaining to it in any of their advertisements (11 U.S.C. 110f).

How much will hiring the services of a BPP cost?

Under 11 U.S.C. 110, a BPP is prohibited from charging more than the maximum allowable amount set by the U.S. Supreme Court in its rules, or by the U.S. Judicial Conference in its guidelines, which is $150 inclusive of the photocopying, messenger or courier, postage, telephone, or any other expenses incurred by the preparation of the papers. That amount excludes the filing fee that must be paid to the bankruptcy court clerk; the BPP may not make the payment, it is the consumer who is to pay directly to the court.

Under 11 U.S.C 110 (g) a BPP may not collect court fees from or on behalf of the consumer.

In addition, inside of the 11 U.S.C. 110 (l), the BPP that violates the above mentioned limitations are subject to a $500 fine times three if the court finds out that he/she .


The BPP seems handicapped, why can’t the consumer just hire a bankruptcy lawyer?

Bankruptcy is a booming business, more consumers are expected to file in the coming years, and so lawyer fees are also expected to increase. If a regular consumer opts for the FULL services of a lawyer, chances are he/she would not be able to afford the industry rate. The BPP understands this (lawyer fees plus BPP’s limitations) and so they contact the lawyers for the consumers to perform what they cannot: give legal counsel and tell the consumer what to input in the papers. The advice can be given on the phone for a modest fee.

Other Resources:

The costs of hiring a bankruptcy lawyer
Who should file bankruptcy