What Should I Know Before Hiring a Bankruptcy Petition Preparer

Filing bankruptcy is a tough decision. Prior to filing bankruptcy, a person may consider other approaches to handle debt such as debt consolidation, mortgage modification, borrowing from family or friends, obtain a second job or settle with creditors for a reduced payment or reduced interest rate.

Should You Hire a Bankruptcy Petition Preparer?

Is hiring a Bankruptcy Petition Preparer a good idea? While there may be cost savings, hiring a bankruptcy attorney is usually the best option. A petition preparer is limited to being a typist. Also, keep in mind that it's contingent upon the information provided by the debtor and the accuracy of the typing of the information on the Petition, Schedules, and Credit Matrix. By not using an attorney, the debtor is responsible for providing accurate information for the Petition, Schedules, and Credit Matrix. One of the disadvantages of hiring a petition preparer is that they cannot inform you of which exemptions are allowed.

If bankruptcy is your last resort, filing Chapter 7 liquidation bankruptcy may provide you the financial relief you need to eliminate debt and make a fresh start. For some debtors with a vehicle, they may decide to choose a reaffirmation agreement, and debtors with homes, they may decide to choose a Chapter 13 bankruptcy with a loan modification or a Chapter 13 bankruptcy for reorganization of debt. 

Where can I learn more about Bankruptcy

One resource to check prior to using a Bankruptcy Petition Preparer is the United States Department of Justice for consumer information on bankruptcy. The Department of Justice provides a variety of links, videos and downloadable information for you to review prior to using a petition preparer.

To review the bankruptcy basic videos, you can go to the United States Bankruptcy Court Southern District to learn more on Chapter 7 bankruptcy.

Bankruptcy Basics Part 1 - Introduction

Limitations of Petition Preparer

Due to financial restraints, an individual or a married couple filing jointly may choose to hire a petition preparer. A petition preparer is a non-attorney who types the bankruptcy petition, schedules, declarations, and must sign the documents if he or she is preparing your bankruptcy petition. Below are a few of the disadvantages of hiring a petition preparer instead of an attorney:

• A Bankruptcy Petition Preparer cannot give you legal advice

• A Bankruptcy Petition Preparer cannot attend the 341 hearing with you

• A Bankruptcy Petition Preparer cannot explain the legal consequences or advise debtor on the potential legal outcomes of bankruptcy case

• A Bankruptcy Petition Preparer cannot influence the debtor's choice of which bankruptcy chapter to file under

• A Bankruptcy Petition Preparer cannot inform you of what property is exempt

Prior to choosing a petition preparer, ensure you are not being overcharged. The United States Bankruptcy Court maximum rate a petition preparer may charge is $200. In some states, the maximum may be lower:

• California is set at $150 in the Northern District

• North Carolina is set at $80

• Michigan is set at $100

• New York is set at $100

• Wisconsin is set at $75

Depending on the state you live in and United States Bankruptcy Court District has jurisdiction determines the maximum a petition preparer may charge you for their services.

Prior to using a Bankruptcy Petition Preparer, it is recommended that a debtor at least obtain a legal consultation with a bankruptcy attorney by utilizing The Florida Bars' Lawyer Referral Service and verify the Florida attorney's license status. There are several experienced bankruptcy attorneys in Florida who may provide bankruptcy services at an affordable rate.

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