Bankruptcy Petition Preparers

Bankruptcy petition preparers (BPPs) are individuals who can help the debtor with filling out the official forms, printing them out, and placing them in the order that the local court prefers. BPPs are considered to be a debt relief agency, and are regulated as, and are legally prohibited from giving legal advice, such as what chapter to file under; what debts will be discharged; or to provide legal references that are required in some of the forms, such as those for claiming exemptions, nor can they help the debtor with the Chapter 13 repayment plan, which is probably the most difficult form to fill out in a Chapter 13 bankruptcy. BPPs generally charge between $100 and $200, depending on the district; however, they are subject to legal caps because the BPPs are only supposed to be helping the debtor to type the forms and organize them, not provide legal advice.

BPPs do not require any specific training or experience, but are regulated by §110 of the Bankruptcy Code and supervised by the United States Trustee. The BPP must file Form B-280, Disclosure of Compensation of Bankruptcy Petition Preparer, which must have the name, address, telephone number, and security number of the BPP and the amount and timing of the debtor's payment to the BPP, and an itemized list of the documents that were actually prepared.

At the creditors meeting, the trustee may ask the debtor about the BPP, including what they actually did and what they charged, and whether the BPP provided any legal advice. In some districts, they may not even be allowed to provide you written materials on bankruptcy law. If BPP is found to have violated the law, then the BPP may be forced to return the debtor's fee.

BPPs must submit a statement under oath with each petition stating how much they were paid in the previous 12 months and any fees that the debtor still has to pay. Larger fines are imposed on the BPP if they help the debtor to engage in any fraudulent act or to commit fraud. Because of the limited fee, many BPPs will only work on Chapter 7 cases because they are much simpler to file and because the BPPs are not permitted to help the debtor to draft a repayment plan, which is the most complicated form that must be submitted, since that is considered to be legal advice.