Deciding to file Chapter 7 bankruptcy is never easy. When debts become too high to manage, bankruptcy might be the best option.
Filing for Chapter 7 bankruptcy protection is expensive. Attorney and court fees can cost a petitioner $1200 – $3500. Many people who file for Chapter 7 bankruptcy protection save or borrow money for the fees.
Bankruptcy attorneys are valuable resources, but many debtors who are facing financial ruin can not afford the fees. A growing percentage of new bankruptcy petitioners are filing for protection using professional bankruptcy preparation services.
It is legal to file bankruptcy without an attorney’s guidance. Section 110 of the United States Bankruptcy Code defines bankruptcy petition preparers as non-attorneys who prepare bankruptcy-related documents for a fee.
There are 6 things a person needs to know about filing Chapter 7 bankruptcy without using an attorney.
Petition Preparers May Not Give Legal Advice
Only lawyers can give legal advice to clients. Bankruptcy petition preparers may not advise clients about which bankruptcy chapter to file, property exemptions, discharged debts or whether a client can keep property. It against the law for any person to practice law without a license.
Clients Must Provide Accurate Information
Bankruptcy petition preparers complete documents according to information provided by the client. It is vital that clients provide accurate and truthful information to the preparers. United States Bankruptcy Court holds the petitioner liable for any information that is misrepresented in the document.
Petition Preparers May Not Charge Excessive Fees
People who consider filing for bankruptcy protection are financially vulnerable. There are some businesses that seek to capitalize on their vulnerability. The United States Bankruptcy Court frowns upon preparers who charge fees the Court deems to be excessive. Courts have the power to require preparers who charge excessive fees to return the fees to the petitioner.
Clients Manage Their Bankruptcy Cases
The only duty for the preparer is to prepare accurate and complete documents according to the information that is provided. Clients must file the completed document on their own. They must manage the bankruptcy case from the filing to the discharge.
Petition Preparers Do Not Attend Court Meetings
Clients who file bankruptcy without an attorney must attend the ‘341 Meeting of Creditors’ alone. Bankruptcy petition preparers may not act as representation for the clients.
Affordable Alternatives To Hiring Attorneys
Bankruptcy petition preparers charge fees from $100 – $200 for their services. Clients who have hired petition preparers have found the process not to be as intimidating as they imagined. Thousands of petitioners have filed successful petitions without an attorney.
Filing bankruptcy without an attorney may be right for you. It is important that you research bankruptcy information thoroughly, and find a preparer that will complete an accurate and affordable petition.