What are Petition Preparers

Debtors who are unfamiliar with the bankruptcy filing process may assume that only they or their attorneys are afforded the ability to complete a formal application for relief under the Bankruptcy Code. However, this is not the case. An individual may also hire a bankruptcy petition preparer for this task.

As for what a bankruptcy petition preparer is supposed to do, Section 110 is fairly explicit as to what forms are to be filled out and how. Bankruptcy petition preparers are to sign their name and address on the completed document, as well as the names of any other persons involved with its preparation, and then submit this petition to the applicant party to sign where necessary. It must be stressed that a bankruptcy petition preparer cannot submit this form on the debtor's behalf as per the letter of the law.

This incapacity of bankruptcy petition preparers to file the petitions they ready for the sake of bankruptcy seekers is just the proverbial tip of the iceberg, though, in terms of how they are restricted by the Bankruptcy Code. As much as the bankruptcy petition preparer is not a stand-in for the debtor, he/she/it is not a surrogate for the debtor's legal representative. Appointed bankruptcy petition preparers are at no point in the completion of the application form to confer legal advice on prospective relief seekers. Among the things they are forbidden to influence debtors in: whether or not they should file for bankruptcy, under what chapter of Title 11 is most appropriate for them to file, and whether their debts can be discharged.

Moreover, bankruptcy law is very strict when it comes to the compensation a bankruptcy petition preparer may receive. Going back to Section 110, bankruptcy petition preparers may only receive a certain maximum fee for the services they render, an amount nailed down by either the Supreme Court or the Judicial Conference of the United States. Furthermore, they may not accept monies associated with the filing fees designated for the court.

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