U.S. Department of Justice Office of the United States Trustee Central District of California _______________________________________________________________________________________ Issued: March 1, 2014 UNITED STATES TRUSTEE CENTRAL DISTRICT OF CALIFORNIA BANKRUPTCY PETITION PREPARER GUIDELINES In accordance with its obligation to monitor compliance with 11 U.S.C. § 110, the United States Trustee for Region 16, which encompasses the Central District of California, is providing the following guidelines for non-attorneys who prepare documents for filing in the United States Bankruptcy Court. A non-attorney who prepares bankruptcy documents for compensation, whether paid or agreed to be paid, is subject to the requirements and prohibitions of section 110. Preparers are encouraged to read the provisions of 11 U.S.C. § 110 prior to undertaking the preparation of any bankruptcy documents. Failure to comply with the bankruptcy code may result in the taking of enforcement actions by the United States Trustee. These guidelines are meant to assist non-attorney preparers and debtors who use them in understanding the provisions of section 110 and actions brought by the United States Trustee under section 110. 1. A bankruptcy petition preparer may only type forms. When a bankruptcy petition preparer provides services that go beyond typing forms, those services can constitute the unauthorized "practice of law." A bankruptcy petition preparer has an obligation to disclose all amounts received from the debtor, or on behalf of the debtor, in the year prior to the filing of the bankruptcy case, and the source of any fee paid. This disclosure should also include all amount owing to the preparer. Under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ("BAPCPA"), such disclosure shall be made on the date the petition is filed with the Bankruptcy Court. A petition preparer has an ongoing responsibility to disclose to the court any fees received or compensation agreement not previously disclosed to the court. Within fourteen (14) days of receiving additional compensation or entering into an agreement with a debtor(s) for additional compensation, the petition preparer shall disclose all additional fees or compensation arrangements to the court. The charge typically allowed in this district for a bankruptcy petition preparer's services is no more than $200, including, but not limited to, any and all expenses such as photocopying, costs of credit reports, gas, messenger, courier charges, postage and telephone charges. This fee does not include the court filing fee. The United States Trustee may object to any fee above $200. A lower fee ceiling may apply to an incomplete bankruptcy filing, if the documents shows limited typing, or where a preparer acts incompetently or illegally. If the reasonableness of a bankruptcy petition preparer's fee is challenged, the burden of showing that the fee is reasonable belongs to the preparer. The Bankruptcy Court determines what fee is reasonable. 2. 3. 4. U. S. TRUSTEE BANKRUPTCY PETITION PREPARER GUIDELINES, page 2 5. The Bankruptcy Code provides that the Bankruptcy Court may disallow all fees in instances where a petition preparer violates any provision of 11 U.S.C. § 110. Debtors have the right to file their bankruptcy documents in person at the Bankruptcy Court or by mailing them to the court, consistent with the court's procedure. A preparer who files, assists with the physical filing of a petition with the court, or charges a debtor for messenger or courier costs, may be subject to fines under 11 U.S.C. § 110(g) for handling the court filing fee. This prohibition includes a preparer's handling of a money order payable to the "U.S. Bankruptcy Court." A petition preparer may not charge or accept monies from a debtor for the credit counseling or debtor education classes, unless the petition preparer has been approved as a provider by the United States Trustee. Under BAPCPA, a bankruptcy petition preparer is required to sign, give a copy to the debtor, and file with the Bankruptcy Court the Declaration and Signature of Non-Attorney Bankruptcy Petition Preparer (Official Form 19). Form 19 is to be completed and signed before preparing a bankruptcy petition, schedules and statements (or the first of any other paper if the bankruptcy petition preparer has not prepared the petition), and before accepting any money from the debtor(s). A bankruptcy petition preparer should use the Official Court Forms to prepare documents. These forms are available for no cost on the Bankruptcy Court's website. Some providers of attorney software, for example, do not include petition preparer signature blocks on certain documents, that are included on the Official Forms. A bankruptcy petition preparer is not an attorney and is not authorized to practice law. As defined by statute and case law, the activities that constitute the practice of law in the bankruptcy court include, but are not limited to, the following: A. B. C. D. E. F. G. Determining when to file bankruptcy or whether to file a bankruptcy petition; Explaining the difference between chapters or determining under which chapter of the Bankruptcy Code to file a voluntary petition; Explaining information necessary to complete the bankruptcy petition; Advising debtors regarding the claiming of exemptions; Explaining or determining which debts are priority, secured, or unsecured; Suggesting or determining where items belong on the petition, based on information provided by a debtor; Preparing any pleadings other than filling out official forms promulgated by the United States Supreme Court or by the United States Bankruptcy Court of the Central District of California; Explaining or discussing the impact that a bankruptcy filing may have on an eviction or foreclosure proceeding; Explaining or discussing the impact that a bankruptcy filing may have on the dischargeability of debts, including outstanding student loans or taxes, or whether a debt will be discharged; Explaining, discussing, or assisting a debtor with a reaffirmation agreement; 6. 7. 8. 9. 10. H. I. J. U. S. TRUSTEE BANKRUPTCY PETITION PREPARER GUIDELINES, page 3 K. L. M. Assisting or appearing with the debtor or on a debtor's behalf at the § 341(a) Meeting of Creditors; Discussing or assisting a debtor with determining whether a certain debt should be reaffirmed or redeemed; and Providing advice or guidance to a debtor regarding the actions that may