7 reasons that it’s a bad idea to hire a non-attorney to prepare your bankruptcy petition.

By Alfred Villoch, III, with Savage, Combs & Villoch, PLLC

Bankruptcy is a complicated and paperwork-intensive process. It involves filing a petition, schedules and statements of assets and liabilities, a statement of income, and documents accounting for transfers, to name a few things. The initial documents amount to almost 50 pages. These documents are subject to review by trustees and federal bankruptcy judges. Errors and nondisclosures can immediately jeopardize one’s case. Sadly, however, many people resort to using non-attorneys to prepare their bankruptcy paperwork simply because these non-attorneys are cheap compared to attorneys. But you get what you pay for, and below are 7 reasons why:

1. Non-attorneys cannot advise you whether it’s even a good idea to file bankruptcy. With a free consultation, an attorney can advise you within 30 minutes whether there are other options besides bankruptcy.

2. A non-attorney petition preparer can be anyone off the streets. There are no qualifications or requirements to prepare these documents. Would you really want to put your trust in just anyone’s hands? With an attorney, you’re at least ensured that the person has a law degree, has passed the bar examination, has been admitted the bar (and the background checks that includes), and has been admitted to the federal court.

3. A non-attorney cannot advise you which debts are eliminated or discharged in the bankruptcy.

4. A non-attorney cannot advise you about what property will be exempt in bankruptcy. Put another way, he or she cannot tell you if you can keep your home, your vehicle, or your tax refund. And if they do advise you, do you really want to trust that advice?

5. Importantly, a non-attorney cannot represent you at your 341 meeting of creditors. In EVERY bankruptcy case, a debtor must attend a 341 meeting of creditors at the federal courthouse. At that meeting, the trustee will place the debtor under oath and ask questions about the bankruptcy and information in the filed paperwork. If the debtor files with an attorney, the debtor has the comfort of knowing that the attorney had not only prepare the paperwork, but is present at the 341 meeting to answer any questions from the trustee if directed to the attorney about the paperwork. With non-attorneys, a debtor is alone at the 341 meeting, which is very stressful and causes significant uncertainty, especially when you see that most other debtors have an attorney with them.

6. Similarly, upon review of the bankruptcy paperwork, a trustee will know that a non-attorney prepared the papers because the preparer must disclose that in the petition. A trustee may review the paperwork with more scrutiny for errors and omissions because a non-attorney prepared it.

7. If there are any errors and omissions, bankruptcy attorneys often carry malpractice insurance; whereas, many non-attorneys who prepare petitions do not have insurance in case there is a mistake that causes the client damages. In short, you might have very little recourse if the non-attorney makes mistakes.