I get it. I have been a bankruptcy attorney for more than 20 years and the people I work with like you are short on cash. Now you have an attorney who is willing to help you, with his hand out, asking for money and you are broke. So you might be looking of a cheaper bankruptcy alternative. (Check out my recent blog on funding your bankruptcy) As my dad always said: “You get what you pay for.” Sometimes people turn to someone called a bankruptcy petition preparer to try and save a few bucks on thier bankruptcy. Preparers, if they are following the law, can’t do much of anything except serve as data entry people.
Specifically, they can’t:
- Give you legal advice–including advising whether you should file bankruptcy or what chapter of bankruptcy you should file; or
- Advise you about what property exemptions to claim (be it state, federal, or what state’s exemptions apply).
Preparers are also subject to Utah state unauthorized practice of law statutes. As per the U.S. Trustee’s office: “bankruptcy petition preparers can only type documents and must charge a reasonable fee.” And you are the one that is supposed to tell them what to type.
The United State Trustee’s Office in Utah requires that you fill out a document at the 341 Meeting of Creditors if you used a preparer. They want to know all about what you did with them and who did what. They frequently take action against preparers. Preparers are unlicensed, unregulated, uninsured and are often the subject of U.S. Trustee enforcement action.
In my opinion hiring a bankruptcy petition preparer is a really bad idea.
Bankruptcy law is complicated–very complicated. Sometimes people see the bankruptcy forms online and think anyone with a computer can just fill those in, file them, and save a bunch of money. The problem is each one of those questions that you see in the paperwork actually has a U.S. Code section behind it and a most have a body of case law as well. Unless you know the ins and outs of the questions being asked in the paperwork you are playing with fire and one wrongly worded answer will get yourself burned.
One last thought:
You stand to gain the most by filing bankruptcy, not your lawyer, your trustee, or even your bankruptcy judge. My clients wipe out (discharge) huge amounts of debt–most tens of thousands–some even millions. The real benefit goes to you. Even if you only have $10,000 of debt to wiping out you are getting a huge relief from getting a bankruptcy discharge. Why would you hire a bankruptcy petition preparer who isn’t qualified to give you legal advice, who answers to no one, and is most likely uninsured? Why try to save $1,000 to $1,500 on legal fees (in most cases) when you’re trying to get rid of so much more than that in bankruptcy? It makes no sense.
Hiring a bankruptcy petition preparer is a really bad idea. It’s also not a cost-effective, and risky. Instead, hire an experienced Utah bankruptcy lawyer to guide you through the process. In Utah call us for a free consultation at 801-221-9911.