Who Can Prepare Bankruptcy Petitions
Once a person decides to move forward with bankruptcy, they ask themselves whether they can prepare the bankruptcy petition on their own or if the need someone else to help them draft it. If they decide to hire someone, then they have to choose between an attorney or a petition preparer. This blog discusses the advantages and disadvantages of:
- preparing the petition on your own,
- hiring a petition preparer, or
- retaining the services of a professional attorney.
If you decide to seek bankruptcy relief, there are three categories of people who can prepare your bankruptcy petition. First, there is yourself. As the debtor, you can always prepare your own petition and file it. Second, you can hire a bankruptcy petition preparer, otherwise known as a paralegal. Third, you can retain the services of a licensed attorney who practices bankruptcy in your jurisdiction.
Filing Bankruptcy Without an Attorney or Petition Preparer
While filing bankruptcy on your own is certainly an option, it is not advised. The petition itself is generally a confusing and difficult document to prepare. Doing it without a solid grasp of the underlying laws is extremely risky. First, you should have a thorough understanding of bankruptcy vocabulary. Not understanding specific legal jargon could cause you to fill in the wrong information. Second, you will have to invest substantial time to learning the bankruptcy process. This includes:
- how to file the petition,
- which jurisdiction to file it in, and
- how to obtain a hearing date.
Finally, and perhaps most importantly, not knowing bankruptcy law and improperly exempting your assets could lead to the loss of property through liquidation.
If you decide to try it for yourself anyways, there are plenty of books at the local law library that can guide you through the process. If you find that you are in way over your head, you can always then hire an attorney.
Should I Higher a Bankruptcy Petition Preparer
The second category of people who can help you prepare your petition are bankruptcy petition preparers. These are people who typically advertise their services on Craigslist for around $200. While their advertised price may seem appealing at first, these paralegals are probably your worst bet.
Petition preparers might be the worst option because oftentimes their clients need to attend multiple hearings and can lose property through liquidation. This is because they are untrained in bankruptcy law, and are not licensed to practice it. They generally lack knowledge sufficient to properly exempt your assets. Moreover, it is illegal for petition preparers to give you legal advice. Therefore, unlike an attorney, preparers cannot review your financial documents and advise you of your options. If they advise you, they are engaging in the unauthorized practice of law, which is a misdemeanor crime in the state of California. Moreover, they are not attorneys so they may not have the formal legal education.
If you decide to hire a petition preparer, keep in mind that they cannot accompany you to the court hearing. They do not represent you. Also, you will have to fill out extra paperwork for the Trustee. In these documents you are required to disclose the identity of your paralegal. Additionally, you will potentially have to answer extra questions about the hiring of your paralegal.
If you decide to give a paralegal a call, just ask them for legal advice on whether you should file bankruptcy. If the provide you with advice, they have engaged in the unauthorized practice of law, and have demonstrated their unfamiliarity with law and bankruptcy.
Hiring an Attorney to File Bankruptcy
The final category of people you can hire is a licensed attorney authorized to practice bankruptcy in your jurisdiction. The advantages are bountiful. You will get professional representation to deal with creditor harassment, you will be properly and legally advised of your financial situation, your assets will be properly exempted and saved, any wage garnishments or bank account levies will be stopped, and an attorney will be with you whenever you have to appear in court. In short, there really are no disadvantages to hiring an attorney.
You may have to pay more for an attorney, but your money would be well spent. Furthermore, the attorneys at Orange County bankruptcy attorneys understand the seriousness of your financial situation, so we offer payment plans to help you out. At a minimum, you should contact a local bankruptcy attorney that does not charge for consultations, and speak with him/her before you decide who to hire. You can minimize your risks to your bankruptcy case and assets that way.