Chapter 10 Help Beyond the Book

• Library: How to File for Chapter 7 Bankruptcy (Nolo) (2022 Ed.)

CHAPTER 10 Help Beyond the Book

Debt Relief Agencies

Mandatory Contract

Mandatory Disclosures and Notices

Restrictions on Debt Relief Agencies

Bankruptcy Petition Preparers

What a Bankruptcy Petition Preparer Can't Do for You

Fees

How Bankruptcy Petition Preparers Are Regulated

How to Find Bankruptcy Petition Preparers

When You Might Need a Lawyer

Full-Service Lawyer Representation

Litigation Services

How to Find a Bankruptcy Lawyer

Fees

What to Look for in a Lawyer

Legal Research

Sources of Bankruptcy Law

Bankruptcy Background Materials: Overviews, Encyclopedias, and Treatises

Finding Federal Bankruptcy Statutes

Finding the Federal Rules of Bankruptcy Procedure (FRBP)

Finding Local Court Rules

Finding Federal Court Bankruptcy Cases

State Statutes

State Court Cases

Other Helpful Resources

Although this book covers routine bankruptcy procedures in some detail, it doesn't come close to covering everything. That would require thousands of pages, most of them irrelevant for nearly all readers. That said, here are some suggestions if you need more information or advice than this book provides.

The major places to go for follow-up help are:

• bankruptcy petition preparers, when you're ready to file for bankruptcy but need assistance in typing the forms and organizing them for filing in your district
• lawyers, when you want information, advice, or legal representation, and
• law libraries and the Internet, when you want to do your own research on issues raised in the course of your bankruptcy.

Before we discuss each of these resources in more detail, here's a general piece of advice: Maintain control of your case whenever possible. By getting this book, you've taken responsibility for your own legal affairs. If you decide to get help from others, shop around until you find someone who respects your efforts as a self-helper and recognizes your right to participate in the case as a valuable partner.

Debt Relief Agencies

Under bankruptcy law, any person, business, or organization that you pay or otherwise compensate for help with your bankruptcy is considered a debt relief agency—and must identify itself as such. The two main types of debt relief agencies are lawyers and bankruptcy petition preparers (BPPs). Credit counseling agencies and budget counseling agencies are not debt relief agencies. Nor are any of the following:

• employers or employees of debt relief agencies (for instance, legal secretaries)
• nonprofit organizations that have federal 501(c)(3) tax-exempt status
• any creditor who works with you to restructure your debt
• banks, credit unions, and other deposit institutions, or
• an author, publisher, distributor, or seller of works subject to copyright protection when acting in that capacity (in other words, Nolo and the stores that sell its books aren't debt relief agencies).

This section explains what the bankruptcy law requires of debt relief agencies generally, so you'll know what you can expect for your money.

Mandatory Contract

Within five days after a debt relief agency assists you, it (or he or she) must enter into a contract with you that explains, clearly and conspicuously:

• what services the agency will provide
• what the agency will charge for the services, and
• the terms of payment.

The agency must give you a copy of the completed, signed contract.

Mandatory Disclosures and Notices

Debt relief agencies must inform you, in writing, that:

• All information you are required to provide in your bankruptcy papers must be complete, accurate, and truthful.
• You must completely and accurately disclose your assets and liabilities in the documents you file to begin your case.
• You must undertake a reasonable inquiry to establish the replacement value of any item you plan to keep before providing the value on your forms.
• Your current monthly income, the amounts you provide in the means test, and your computation of projected disposable income (in a Chapter 13 case), as stated in your bankruptcy papers, must be based on a reasonable inquiry into their accuracy.
• Your case could be audited, and your failure to cooperate in the audit could result in the dismissal of your case or some other sanction, including a possible criminal penalty.

In addition to these stark warnings—which most debt relief agencies would rather not have to give—a debt relief agency must also give you a general notice regarding some basic bankruptcy requirements and your options for help in filing and pursuing your case. Failure to provide you with this notice—in a timely manner—can land the agency in big trouble.

Finally, every debt relief agency has to give you some plain-English written information about the basic tasks associated with most bankruptcies, such as how to deal with secured debts and choose exemptions. Ideally, debt relief agencies would freely distribute this book, which has all of the information required (and much more, of course).

Restrictions on Debt Relief Agencies

A debt relief agency may not:

• fail to perform any service that the agency told you it would perform in connection with your bankruptcy case
• counsel you to make any statement in a document that is untrue and misleading or that the agency should have known was inaccurate or deceptive, or
• advise you to incur more debt in order to pay for the agency's services (for instance, accepting a credit card or steering you to a cash advance business).

Any contract that doesn't comply with the requirements of debt relief agencies can't be enforced against you. A debt relief agency is liable to you for costs and fees, including legal fees, if the agency negligently or intentionally:

• fails to comply with the law's restrictions on debt relief agencies, or
• fails to file a document that results in dismissal of your case or conversion to another bankruptcy chapter.

In sum, debt relief agencies are on the hook if they are negligent in performing the services required by the bankruptcy law or other services they have agreed to provide.

Bankruptcy Petition Preparers

Even though you feel you're capable of handling routine bankruptcy procedures yourself, you might want someone familiar with the bankruptcy forms and courts in your area to enter your data on the official forms and print them out for filing with the court. For this level of assistance—standard form preparation and organization—consider using a bankruptcy petition preparer (BPP).

What a Bankruptcy Petition Preparer Can't Do for You

BPPs are very different from lawyers. BPPs are prohibited from giving you legal advice, which includes information such as:

• whether to file a bankruptcy petition or which chapter (7, 11, 12, or 13) is appropriate
• whether your debts will be discharged under a particular chapter
• whether you will be able to hang on to your home or other property if you file under a particular chapter (that is, which exemptions you should choose)
• information about the tax consequences of a case brought under a specific chapter or whether tax claims in your case can be discharged
• whether you should offer to repay or agree to reaffirm a debt
• how to characterize the nature of your interest in property or obligations, and
• information about bankruptcy procedures and rights.

Fees

All fees charged by debt relief agencies are reviewed by the U.S. Trustee for reasonableness. However, unlike lawyers' fees, which can vary widely according to the circumstances, a BPP's fees are subject to a cap imposed by the particular district. Caps differ widely in the 91 court districts and can range from $75 to $200. The rationale offered by the U.S. Trustee for this cap—and by the courts that have upheld it—is that BPP fees can be set according to community standards. Because BPPs aren't lawyers and can't give legal advice, they're limited to filling out the forms. Therefore the services they're allowed to provide don't warrant charging the rates for professional assistance.

BPPs are an excellent choice for people who want some help transferring their information to the proper forms.

How Bankruptcy Petition Preparers Are Regulated

Anyone can be a BPP. Yes, anyone. There is nothing in the bankruptcy code that requires BPPs to have any particular level of education, training, or experience. How, then, are BPPs regulated? Regulation is provided by the U.S. Trustee's office, which reviews all bankruptcy petitions prepared by a BPP. BPPs must provide their name, address, telephone number, and Social Security number on the bankruptcy petition, as well as on every other bankruptcy document they prepare. The U.S. Trustee uses this information to keep tabs on BPPs.

BPPs are also regulated at the 341 hearing, where the bankruptcy trustee can ask you how the BPP conducts business. For instance, if you represent yourself, the trustee might ask how you got the information necessary to choose your exemptions (see Ch. 3) or decided which bankruptcy chapter to use.

Can BPPs Give You Written Information?

Under the Bankruptcy Code, BPPs are supposed to prepare your bankruptcy forms under your direction. A BPP isn't a cheap alternative to hiring a bankruptcy lawyer. You must do your homework before attempting to file for bankruptcy on your own. For instance, you decide the exemptions to choose, chapter to file, approach to take with secured debts (car note, mortgage, and so on), and values to place on property.

If the BPP provided you with this information, the trustee might refer the case to the U.S. Trustee's office. The BPP will be required to explain the rule violation against giving legal advice. The consequences could include being forced to return your payment or, if it's not the first offense, being banned from practicing as a BPP. Other than the inconvenience of being dragged into court, none of this will affect your case.

BPPs can be fined for actions and inactions spelled out in the bankruptcy code (11 U.S.C. § 110)...