What are some of the concerns of the U.S. Bankruptcy Court regarding bankruptcy petition preparers? ...

(Answer to #1)  The law defines a bankruptcy petition preparer (BPP) as a person other than an attorney for the debtor or an employee of such attorney . . . who prepares for compensation a document for filing. Many preparers operate within the strict limits the law imposes on them, but some do not. Bankruptcy petition preparers are required to notify clients, in writing, that they are not attorneys and that because of their lack of attorney status, they cannot render legal advice or engage in the practice of law.

Many bankruptcy petition preparers have been fined for the unauthorized practice of law and for collecting higher than the 200.00 fees for preparation allowed by the bankruptcy court. In its fiscal year 2011 report, the U.S. Trustee Program said bankruptcy trustees nationwide had filed 504 actions against BPPs, with a success rate of 98.8 percent. More than 1.9 million in fines were imposed and some 419,000 in fees recovered during that year, the report said.

Students will offer their own reasons for or against BPPs and their own reasoning regarding the role of a BPP leading the BPP to commit UPL.

(Answer to #2)  Bankruptcy Code 11 U.S.C. 110(a)(1 ) defines a bankruptcy petition preparer as a person, other than an attorney for the debtor or an employee of such attorney under the direct supervision of such attorney, who prepares for compensation a document for filing. Bankruptcy petition preparers are independent paralegals and do not work as employees under the direct supervision of attorneys.

Debtors who cannot afford legal representation may opt to use a bankruptcy petition preparer. Once the initial documentation such as the petition and schedules, are prepared, debtors then file the initiating documents and represent themselves before the bankruptcy court.

Bankruptcy petition preparers cannot give legal advice. They can only enter information as it is provided to them on the bankruptcy forms and can charge only a reasonable fee. Local bankruptcy court rules limit what the bankruptcy petition preparer can charge, with nominal fees ranging from 100 to 150. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 places strict requirements on preparers as well as penalties for those who fail to comply with the statute. The concerns of the U.S. bankruptcy courts regarding bankruptcy petition preparers are expressed in the following article.

(Answer to #3)  a

(Answer to #4)  privilege

(Answer to #5)  official

(Answer to #6)  bankruptcy petition preparers

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