B is For Bankruptcy Petition Preparer
We have a serious issue here in the Central District with the BPP ["Bankruptcy Petition Preparer"]. The Central District of California has more than 25% of the entire nation's Pro Se Debtors, which are Debtors that file their bankruptcy case without an attorney. That's a whopping 38,667 cases filed without an attorney. This volume of self-represented parties in bankruptcy has a significant impact on judicial resources and access to justice for all in bankruptcy. Extra time is required of the court's clerks, judges and attorneys to provide assistance and correct errors when these self-represented parties make mistakes in their papers. A significant portion of these Debtors seek the assistance of a Bankruptcy Petition Preparer, The BPP. Problems can and do occur when Consumers use non-lawyers to assist them. You may be saving money now, but might need to hire an attorney later to fix mistakes if you hire the wrong BPP. Last week, I posted a warning in, Attention Debtors Without an Attorney, and provided important information on where to get help for FREE.
11 U.S.C. Section 110 provides for penalties for persons who negligently or fraudulently prepare bankruptcy petitions. The bankruptcy courts are now tracking BPPs and prohibiting those that frequently make mistakes from filing cases within the district. The most common mistakes made by the BPP is the wrong exemptions are used to protect assets of the debtors from being taken by the Trustee. So, when you hear horror stories of someone who filed bankruptcy and the trustee took their property to pay creditors, it could be they hired someone who incorrectly applied exemptions and the Debtor suffered the consequences. This usually can be corrected, and this a good reason to hire an attorney from the beginning of your case.
Remember that a BPP cannot give you legal advice or tell you which set of exemptions to use in preparing your bankruptcy case and, if they do, they are engaging in the practice of law without a license to do so. Cal. Bus. & Prof Code Sections 6125-6128 define what constitutes the practice of law and persons authorized. There is no substitute for proper advice from an attorney. I cannot emphasize enough that many of our local practitioners will provide a FREE consultation to help you choose whether to file bankruptcy, if so, which Chapter to file under and what you can expect from the bankruptcy process. Only a licensed attorney can provide such advice.
There is help if you've been defrauded by a BPP. We have fee shifting remedies where the fees paid can be diverted to the attorney you retain to correct the BPP's mistakes under 11 U.S.C. Sections 523, 526 and 110. It's important to cooperate with the attorney and sign a declaration that states the problems you've had and why you had to hire an attorney. Then, be sure to attend the hearing on that matter and explain the situation to the judge. This will help you obtain the assistance from this attorney, perhaps without any additional money being paid out of pocket for the much needed service.
Other B Words in the Bankruptcy Alphabet: Beware of These Credit Card Offers, Bar Date, and Bank Account Levy.
Photo Credit: Leo Reynolds
A fundamental part of deciding to file bankruptcy is helping our clients achieve their financial goals. One of the toughest decisions clients struggle with is deciding whether to keep their homes. Many Californians are faced with underwater property values; denied loan modifications; falling behind on mortgage payments when their teaser rate terms end; and the fact that we live in a non-judicial foreclosure state where a home can be foreclosed without notice to the courts.
