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Chapter 13 Bankruptcy and Bankruptcy Petition Preparers

I had a very frustrating day recently.  I spoke to someone who had just been through their Meeting of Creditors in the Chapter 13 bankruptcy and had a bad experience.

One issue was whether or not a Chapter 13 was appropriate for them, but that’s another post.  The person who met with me had decided that in order to save their house from foreclosure, they would file a Chapter 13 petition with the help of a  bankruptcy petition preparer.  Such preparers are not attorneys, and certainly are not licensed to practice law before the bankruptcy court.  They can’t give legal advice, they can only help you fill out the forms according to your direction …supposedly.

And they charge ridiculous amounts of money for doing a mediocre job at best.  In the case in front of me, even worse.  The person had been charged $500 for this “help” and it was very badly done.  Schedules blank that should have been filled in,  secured debts listed in the priority debts schedules, values typed where descriptions of assets should go, blanks where values should be.  And the Chapter 13 plan was so incoherent that the debtor got a three page objection from the standing CH 13 Trustee’s office.

I’m confident that the standing CH 13 trustee’s office will go after that preparer but even if that one is dealt with, the bankruptcy petition preparer business is simply full of ripoff artists.

I’m sure you think I’m saying that just to get business diverted to me instead of them.  But it isn’t true. It really is a shady, corrupt and incompetent business.  And the reality is that Chapter 13 are simply not something that “pro se” debtors are successful at.  They are complex petitions to prepare, the process of confirming Chapter 13 Plans is a complex negotiation and the standing CH 13 trustee offices are too busy and too cynical to really assist “pro se” debtors.

So another Chapter 13 debtor wasted a lot of money and a lot of time on a forlorn hope and will only get a failed Chapter 13 filing on their record when its inevitably dismissed.  And if that person I saw actually managed to get a Chapter 13 plan confirmed, the errors in the petition will cost them about three times the amount of money that paying a competent consumer bankruptcy attorney would have cost.

Posted in Bankruptcy.

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