Beware of the Fake Bankruptcy Attorneys-The Paid Petition Preparer

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You have probably seen the signs on bus stop benches or random billboards advertising for an extremely cheap bankruptcy filing.

These signs might be from the bankruptcy mills or $0 Money Down Bankruptcy outfits I’ve warned about before.  Or they can be from what I call the “Fake Bankruptcy Attorney” or the Paid Bankruptcy Petition Preparer.

What is a Paid Bankruptcy Petition Preparer?

The Bankruptcy Code does not require any one to file a bankruptcy through a bankruptcy attorney. One can choose to file with a bankruptcy attorney or go at it alone, what the legal community calls “pro se”. There is also kind of a middle option, which is to get some help from a Paid Bankruptcy Petition Preparer.

A Paid Bankruptcy Petition Preparer is someone who can prepare and file a debtor’s bankruptcy petition. What I mean by “prepare” is that the Paid Bankruptcy Petition Preparer can type up a debtor’s bankruptcy petition as instructed by the debtor. They are not a bankruptcy attorney and cannot provide any legal advice such as:

• Whether someone should file for bankruptcy;
• Which chapter of the Bankruptcy Code to file under;
• What exemptions should be claimed or how exemptions work;
• What a discharge of debt is and what kind of debts are/are not discharged;
• Whether to redeem or reaffirm any debts;
• Tax consequences of filing bankruptcy

Essentially what a debtor gets out of a Paid Bankruptcy Petition Preparer is a typist. If they provide any of the above legal advice, they are breaking the law as an unauthorized practice of law (practicing without a law license). If you were a debtor, would you trust that the advice being given by a paid bankruptcy petition preparer was any good? Why risk it?

A Lincoln resident recently was sent to prison for the unauthorized practice of law. Clinton Brooks, Jr. was charged and found guilty of practicing without a license after a family complained that their child custody case was mishandled by Brooks. Brooks never said he was an attorney, but he did instruct the family on what documents to file and when to file them. Don’t be the victim of someone who thinks they are an attorney. Your case could go terribly wrong and the recourse you have against the person likely is not enough to fix the situation. Attorneys have malpractice insurance to protect their clients in case the attorney negligently provides bad legal advice.

So is it worth using a Paid Bankruptcy Petition Preparer?

If you think you need to file bankruptcy, you should at least meet with a bankruptcy attorney to determine whether you can or should file for bankruptcy. After meeting with an attorney you can decide what is the best route for you: prepare everything yourself, utilize a bankruptcy paid petition preparer, or hire a bankruptcy attorney.

In my opinion, the only reason to use a bankruptcy paid petition preparer is if you do not have a computer or typewriter available to draft the documents necessary to file for bankruptcy.

Things to Watch Out For With a Paid Bankruptcy Petition Preparer

Here are a few things to watch out for when dealing with a Paid Bankruptcy Petition Preparer:

• They charge a fee for the petition forms (they are free online on the Nebraska Bankruptcy Court’s website and other sites);
• They collect the Court’s filing fee along with other fees;
• They instruct you how you should answer questions or write statements in the petition and schedules;
• They tell you what to debts will be discharged (wiped away);
• You don’t sign any fee agreements;
• You don’t sign any documents;
• You don’t review the petition and schedules before signing them.

If you want to make sure that your bankruptcy case is handled properly by a competent and experienced Nebraska bankruptcy attorney, contact me at (402) 957-2750 or schedule an appointment online.