By Kitty J. Lin, Attorney at Law

If you have to file for bankruptcy, you probably do not have much money to spend after paying for rent/mortgage, food, utilities, and other necessities.  You may not even have enough money to pay for those necessities.  That is why when people need to file bankruptcy, they try to find the cheapest method.  A lot of people turn to bankruptcy petition preparers to prepare their bankruptcy petition, because they believe that is the lowest cost.  However, bankruptcy petition preparers may end up costing you way more than bankruptcy attorneys may charge if they incorrectly prepare your petition and your assets are not adequately protected.  The Bankruptcy Code tries to protect your rights when it comes to bankruptcy petition preparers.

First, according to 11 U.S.C. §110, bankruptcy petition preparers can not offer you legal advice.  That means they cannot tell you whether you should file for bankruptcy at all, what chapter of bankruptcy to file under, when to file, whether your debts will be discharged, whether you can keep your assets, and other bankruptcy procedures and rights.  All they can do is prepare your petition.

Second, if they do prepare your petition, they have to provide you with notice that they are bankruptcy petition preparer and that they are not allowed to give legal advice, and they need you to sign the document and file it with the court.  They need to provide you with full disclosure.  They also need to provide their information in your bankruptcy filing, such as their name, ID number, address, and other identifying information.  They need to tell the court that they have taken your money to prepare your bankruptcy petition.

Finally, in the Northern District of California, bankruptcy petition preparers cannot charge you more than $150.00 total to prepare your petition.  This includes preparing, photocopying, and forwarding your bankruptcy papers to the bankruptcy court. Bankruptcy petition preparers are not bankruptcy attorneys and cannot provide any legal advice.

So, in summary, if you’ve paid more than $150 to a bankruptcy petition preparer, you have paid too much.  That’s because they cannot do anything for you other than actually preparing your schedules and forms.  If anything goes wrong, you are the one that is left holding the bag.  It is highly advisable that if you need to file for bankruptcy, please consult with an experienced attorney.  Although they cost more than a bankruptcy preparer, they can save you thousands of dollars if something goes wrong, protect your assets, relieve the stress of the process, and save you time.  Peace of mind is sometimes worth more than saving a couple dollars, and as the old saying goes, “You get what you pay for.”

You need to consult our bankruptcy lawyer regarding your financial situation if you are thinking about filing bankruptcy.  Please call us at 877-9NEW-LIFE (877-963-9543) today to schedule a free consultation.  You may also go to our website at www.WestCoastBK.com for more information about the bankruptcy process.