Answer to Question 1
Bankruptcy Code 11 U.S.C. 110(a)(1 ) defines a bankruptcy petition preparer as a person, other than an attorney for the debtor or an employee of such attorney under the direct supervision of such attorney, who prepares for compensation a document for filing. Bankruptcy petition preparers are independent paralegals and do not work as employees under the direct supervision of attorneys.
Debtors who cannot afford legal representation may opt to use a bankruptcy petition preparer. Once the initial documentation such as the petition and schedules, are prepared, debtors then file the initiating documents and represent themselves before the bankruptcy court.
Bankruptcy petition preparers cannot give legal advice. They can only enter information as it is provided to them on the bankruptcy forms and can charge only a reasonable fee. Local bankruptcy court rules limit what the bankruptcy petition preparer can charge, with nominal fees ranging from 100 to 150. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 places strict requirements on preparers as well as penalties for those who fail to comply with the statute. The concerns of the U.S. bankruptcy courts regarding bankruptcy petition preparers are expressed in the following article.
Answer to Question 2
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