Introduction to Bankruptcy Petition Preparation

What Is a Bankruptcy Petition Preparer?

A bankruptcy petition preparer (BPP) is a non-attorney who prepares, or assists in preparing, documents for filing in a bankruptcy case. The role is defined and governed by 11 U.S.C. § 110, a federal statute that establishes the scope of the role, required conduct, and prohibited activities.

What a BPP Does

A BPP types or otherwise prepares bankruptcy documents at the direction of the consumer. The consumer provides all information, makes all decisions, and directs exactly what goes on each form. The BPP organizes that information and formats it correctly for filing. The BPP role is a document preparation service, not a legal service.

• Collects intake information from the consumer
• Types the consumer's information into the correct official bankruptcy forms
• Organizes the completed packet for consumer review
• Delivers the finalized packet to the consumer for filing

What a BPP Does NOT Do

The boundaries of the role are just as important as the work itself. A BPP is strictly prohibited from:

• Giving legal advice of any kind
• Advising the consumer on which chapter to file
• Recommending how to classify assets or debts
• Representing the consumer in court or at hearings
• Making any strategic decisions on the consumer's behalf
• Using titles or language that implies attorney status

Why the Role Exists

Many consumers facing bankruptcy cannot afford attorney representation. Congress recognized this access gap and created a formal framework for non-attorney document preparers. BPPs fill a legitimate need by helping consumers organize paperwork correctly, while keeping legal decisions with the consumer.

How BPPs Differ from Bankruptcy Attorneys

A bankruptcy attorney is licensed to practice law. Attorneys advise clients, recommend strategy, appear in court, and take on fiduciary responsibility for the outcome. BPPs do none of those things. A BPP prepares documents. The consumer remains solely responsible for all decisions and for actually filing the case.

Federal Statutory Framework

11 U.S.C. § 110 is the governing statute. It sets out who qualifies as a BPP, what conduct is required, what conduct is prohibited, what fees must be disclosed, and what penalties apply for violations. Every BPP must be familiar with this statute before beginning any engagement.

The Legal Framework: 11 U.S.C. § 110

This section covers the operational requirements of § 110. Read each provision as a checklist of what you must do, not merely as background information.

Definition of “Bankruptcy Petition Preparer”

Under § 110(a)(1), a “bankruptcy petition preparer” is a person, other than an attorney for the debtor or an employee of such attorney under the direct supervision of such attorney, who prepares for compensation a document for filing. If you are paid to prepare bankruptcy documents and you are not a licensed attorney, you are a BPP subject to § 110.

Required Fee Disclosures (§ 110(h))

Before accepting any payment, a BPP must provide the consumer with a written disclosure of the total fee charged. The disclosure must itemize all services included in that fee. A court may disallow any fee that exceeds a reasonable amount, and may order a refund of excess fees. Keep a signed copy of every fee disclosure.

• Provide the fee disclosure in writing before any payment is made
• Itemize every service covered by the fee
• Retain a signed copy of the disclosure
• Never charge fees that were not disclosed in the written agreement

Required Signature and Identification (§ 110(b), (c), (d))

A BPP must sign every document prepared for filing, print their name on the document, and include their address and Social Security number (or taxpayer identification number). These requirements apply to every document in the filing packet.

• Sign every prepared document
• Print your full name legibly
• Include your address
• Include your Social Security number or EIN
• Failure to comply is a violation subject to fine

Prohibited Conduct (§ 110(e), (f), (g))

The following conduct is explicitly prohibited under § 110:

• § 110(e): A BPP may not offer legal advice, including advice about whether to file, which chapter to use, or whether any exemption applies. Any advice that requires legal judgment is prohibited.
• § 110(f): A BPP may not use the word “legal” or any similar term in advertising. Terms like “legal document preparer,” “bankruptcy specialist,” or “bankruptcy attorney” are prohibited unless accurate and authorized.
• § 110(g): A BPP may not collect or receive any payment from the debtor for court fees in connection with filing a bankruptcy case. Filing fees must be paid directly by the consumer.

Penalties for Violations

Courts have broad authority to impose penalties for § 110 violations. A single violation can result in a fine of up to $500 (or $2,000 for intentional violations). A court may also order disgorgement of all fees paid, injunctions against future preparation, and criminal referral for repeat violations. These are real consequences that apply to real BPPs.

Court Oversight Authority

Any party in a bankruptcy case, any trustee, any creditor, or the United States Trustee may bring a motion before the court regarding BPP conduct. Courts may order a BPP to return fees, cease operations, or appear for examination. Operating as a BPP means operating within the oversight of the federal bankruptcy court.

Chapter 7 vs. Chapter 13: The Basics

Module 2 covers both chapters in depth. This section gives you the orientation you need to understand document preparation workflow differences.

Chapter 7: Liquidation

Chapter 7 is the most common form of consumer bankruptcy. The consumer discloses all assets and all debts. A trustee reviews the case to determine if any non-exempt assets can be sold to pay creditors. Most consumer Chapter 7 cases are “no-asset” cases, meaning no property is distributed. At the end of the case, eligible unsecured debts such as credit cards, medical bills, and personal loans are discharged.

• Typical timeline: 3 to 5 months from filing to discharge
• Forms include: Voluntary Petition, Schedules A through J, Statement of Financial Affairs, means test forms
• Consumer must qualify based on income (means test)

Chapter 13: Repayment Plan

Chapter 13 allows consumers with regular income to reorganize their debts under a court-approved repayment plan lasting 3 to 5 years. It is used when a consumer has assets to protect or income above the Chapter 7 means test threshold. At the end of the plan period, remaining eligible unsecured debts are discharged.

• Typical timeline: 3 to 5 years while in an active plan
• Forms include all Chapter 7 forms plus the Chapter 13 Plan form
• Requires monthly plan payments to the trustee

Why It Matters for Document Preparation

Chapter 7 and Chapter 13 filings use a shared set of base forms, but Chapter 13 requires additional documents, particularly the repayment plan. The timelines differ significantly, which affects how you schedule document review with the consumer. A BPP must understand which forms apply to which chapter, but does not advise the consumer on which chapter to choose.

BPP Role Regardless of Chapter

The BPP's role is identical regardless of chapter: prepare documents at the consumer's direction. The consumer tells you which chapter they are filing. You prepare the correct forms for that chapter. You do not recommend a chapter, and you do not comment on the consumer's choice.

The BPP Workflow Overview

A BPP engagement moves through six stages. Understanding each stage helps you deliver consistent, compliant service on every case.

Professional Standards and Conduct

Consumer Communication Standards

All communication with consumers must be calm, clear, and free of legal opinions. When a consumer asks a question you are not authorized to answer, your response is: “That is a legal question. I can only help you prepare your documents. You should speak with a bankruptcy attorney for guidance on that.” This answer protects both you and the consumer. Never fill in that gap by offering what sounds like helpful information but constitutes legal advice.

Documentation and Recordkeeping

Keep a complete file for every client engagement. The file must include: the signed fee disclosure, all source documents the consumer provided, a copy of every completed form in the final packet, and the consumer's signed acknowledgment that they reviewed the packet. Some states have additional retention requirements. As a general standard, retain client files for at least three years after the engagement closes.

Conflict of Interest Awareness

A BPP should not prepare documents for a consumer if they have a personal financial relationship with that consumer outside the engagement, if they are a creditor of the consumer, or if there is any other circumstance that could affect their ability to serve the consumer neutrally. When in doubt, decline the engagement and refer the consumer elsewhere.

Confidentiality Obligations

Consumer information collected during an engagement is confidential. Do not share it with third parties without the consumer's written authorization. Do not use consumer financial information for any purpose other than preparing their documents. Secure physical and digital files appropriately. When an engagement ends, retain files as required and dispose of them securely.

Professionalism Expectations

A BPP represents a professional service. Respond to consumer communications promptly, typically within one business day. Meet agreed-upon deadlines. Be transparent about turnaround times and any issues that arise. If you cannot complete an engagement for any reason, notify the consumer immediately and refund any fees for work not yet performed.

Common Mistakes New BPPs Make

The following mistakes appear repeatedly among new BPPs. Recognizing them before you encounter them in practice is the first step to avoiding them.

1. 1

   Giving legal advice.

   This is the most common and most serious violation. Telling a consumer which chapter to file, how to value an asset, or whether a debt is dischargeable is legal advice. Any time you answer a question that requires legal judgment, you have crossed the line.

2. 2

   Failing to complete required fee disclosures.

   The written fee disclosure is not optional. Accepting payment before providing a signed, itemized written disclosure is a § 110 violation. No verbal agreement is sufficient.

3. 3

   Missing identification requirements.

   Forgetting to include your name, address, and Social Security number or EIN on prepared documents is a violation. This applies to every document in every filing packet, not just the petition cover page.

4. 4

   Incomplete document collection.

   Starting preparation before all required source documents are in hand leads to errors, gaps, and rework. A complete intake checklist reviewed before beginning is the correct practice.

5. 5

   Not verifying consumer-provided information against source documents.

   When a consumer gives you a verbal figure and it differs from the source document, the source document controls. Entering unverified verbal information introduces errors and liability.

6. 6

   Accepting fees not disclosed in the written contract.

   Any fee outside the written disclosure is a violation. If the scope of work changes, issue a revised written disclosure and get the consumer's signature before doing additional work.

7. 7

   Using titles that imply attorney status.

   Calling yourself a "bankruptcy specialist," "legal document consultant," or anything that sounds like an attorney title is prohibited under § 110(f). Use accurate descriptions: "bankruptcy document preparer" or "bankruptcy petition preparer."

8. 8

   Failing to retain copies of signed disclosures.

   A signed disclosure you cannot produce is as good as no disclosure at all. File signed copies immediately after each engagement opens.

9. 9

   Taking on cases outside their competency.

   If a consumer presents a situation you have not encountered, do not proceed while figuring it out. Refer the consumer to an attorney. There is no penalty for declining a case. There is real risk in proceeding without competency.

Module 1 — Knowledge Check

Take a few minutes to reflect on the following questions before moving to Module 2. No answers are provided here. The goal is to confirm your understanding before building on this foundation.