Federal Disclosure Requirements: 11 U.S.C. § 110

Overview: Why Federal Disclosures Matter

11 U.S.C. § 110 was enacted specifically to regulate bankruptcy petition preparers. Congress recognized that non-attorney preparers operate in a space where consumers are financially vulnerable, and put in place a statutory framework to protect those consumers from exploitation. The disclosure requirements in § 110 are the primary mechanism for that protection.

Non-compliance with § 110 carries serious consequences: civil fines, disgorgement of fees, injunctions, and in cases of willful violation, criminal penalties. This is the most compliance-critical module in the BPP Certification. Every requirement covered here applies to every engagement you take on, without exception.

Required Disclosures: What BPPs Must Provide

Section 110 requires BPPs to make several specific disclosures. Each one is a legal obligation, not a best practice.

Fee Disclosure

Before any services are rendered, the BPP must provide the consumer with a written disclosure of the exact fee or fee range charged for the service. Key requirements:

• Must be provided before any work begins and before any payment is accepted
• Must disclose the exact amount or a specific range, itemized by service
• Cannot charge fees not listed in the disclosed amount
• Consumer must sign the disclosure acknowledging receipt

Identity Disclosure

The BPP must disclose their identity on every document prepared. This includes:

• Full legal name
• Current address
• Social Security number or Employer Identification Number (EIN)

Preparer Signature

The BPP must sign every document prepared for filing with the court. A signature requirement applies to every document in the packet, not just the petition cover page. Missing a signature on any document is a § 110 violation.

Consumer Copy Requirement

The consumer must receive a copy of every completed document before filing. This is not optional. Provide copies at delivery, confirm receipt, and retain a record that copies were provided.

Cover Sheet Requirement

Some courts require a BPP disclosure cover sheet that identifies the preparer and certifies compliance with § 110. Check the local rules of the bankruptcy court where the consumer will file. Local rules vary, and non-compliance with local requirements is just as serious as non-compliance with the federal statute.

Fee Disclosure Workflow

The fee disclosure is the first compliance step in every engagement. Here is the required workflow:

Sample Fee Disclosure Language

The following is an example of appropriate fee disclosure language. This is operational guidance only, not a legal form. Consult local court rules for any specific required language in your jurisdiction.

Prohibited: Adding Fees After Disclosure

Once a fee disclosure is signed, you may not charge any additional fees not listed in that disclosure without issuing a new written disclosure and obtaining a new consumer signature. Verbal agreements to additional fees are not enforceable and constitute a § 110 violation.

Prohibited Activities Under § 110

Section 110 explicitly prohibits a defined set of activities. Engaging in any of them exposes you to civil fines, fee disgorgement, injunction, and potential criminal liability.

1. 1

   Providing legal advice of any kind.

   Any statement that constitutes legal guidance, whether about chapter selection, exemptions, asset treatment, or debt classification, is prohibited. If it requires legal knowledge to answer, you cannot answer it.

2. 2

   Advising on which chapter to file.

   This is the most commonly violated prohibition. Even a subtle suggestion, like "most people in your situation file Chapter 7," crosses the line. Chapter selection is a legal decision.

3. 3

   Advising on exemptions.

   Whether a specific asset qualifies as exempt under state or federal law is a legal determination. You may list assets as directed by the consumer; you may not advise whether any asset is or should be claimed as exempt.

4. 4

   Representing a consumer in any court proceeding.

   A BPP has no standing in bankruptcy court. You may not attend hearings on a consumer's behalf, communicate with the trustee on their behalf, or file any document after the initial packet is delivered.

5. 5

   Using the word "legal" in advertising without qualification.

   Terms like "legal document preparation" or "legal services" in advertising imply attorney involvement where there is none. Use accurate descriptions: "bankruptcy document preparation" or "bankruptcy petition preparation services."

6. 6

   Charging fees labeled as legal services.

   Your fees are for document preparation. Receipts, invoices, and contracts must reflect that. Do not use the phrase "legal services" in any fee document.

7. 7

   Threatening consumers or creating false urgency.

   Telling a consumer their situation is more urgent than it is in order to close an engagement faster is prohibited. All representations about timelines and consequences must be accurate.

8. 8

   Guaranteeing any outcome.

   A BPP may not guarantee a discharge, a specific repayment plan amount, or any other result. Outcomes depend on legal analysis and court decisions that are outside your control.

Preparer Identification Requirements

Every document submitted to the court must include your identifying information. This is not a cover-page-only requirement. It applies to each individual document in the filing packet.

Required Information on Each Document

• Your full legal name
• Your current address
• Your Social Security number or EIN
• The statement: "This document was prepared by a bankruptcy petition preparer and not by an attorney."

How to Structure This on Prepared Documents

Most preparers include a footer or signature block on each form containing all required identifying information. The signature block should appear consistently on every page of the packet, not just the petition. Review each completed document before delivery to confirm that all identification fields are present and accurate.

Court Oversight and Penalties

Bankruptcy courts have broad authority over BPPs. Any party in a case, including the trustee, the United States Trustee, creditors, or the consumer, can bring a motion challenging BPP conduct or fees. Courts do not need to wait for a complaint to review BPP activity.

Fee Review and Disgorgement

Courts may review BPP fees at any point and order disgorgement if they determine the fees were excessive or not properly disclosed. Disgorgement means returning all fees paid, not just the excess. A court finding that your fees were improper can result in a full refund order regardless of the work performed.

Civil Fines

Fines for § 110 violations are assessed per document. Each document that contains a violation can result in a separate fine. For non-willful violations, the fine is up to $500 per document. For intentional violations, the fine can reach $2,000 per document. A filing packet of 15 documents with an intentional violation on each could result in significant combined fines.

Criminal Penalties

Willful violations of § 110 can result in criminal referral. Criminal penalties include fines and imprisonment. Courts that identify patterns of willful non-compliance have referred BPPs for prosecution. This is not a theoretical risk.

Injunctions

For repeated violations, courts may issue an injunction barring a BPP from preparing documents in bankruptcy cases, either within the district or nationally. An injunction effectively ends the ability to practice as a BPP. Courts have issued such injunctions, and they are a matter of public record.

How to Stay Compliant: A Practical Workflow

Compliance with § 110 is not difficult if your workflow is built correctly from the start. The following practices, applied consistently, cover the core requirements.

• Disclosure first, every time: present the written fee disclosure before any work begins, before any questions about the case, before any payment is accepted.
• Document every fee discussion: keep a written record of when the disclosure was provided, when it was signed, and what amount was agreed upon.
• Never answer legal questions: when a consumer asks something that requires legal judgment, redirect immediately. No hesitation, no partial answers.
• Maintain a compliance file for each client: this file should include the signed fee disclosure, communication log, all source documents received, and copies of all prepared documents delivered.
• Annual self-audit: once per year, review your standard forms, scripts, and procedures against current § 110 requirements. The statute does not change frequently, but local court rules do.

Escalation Situations

The following situations require immediate escalation to an attorney referral. In each case, stop work, document the situation, and refer the consumer to a bankruptcy attorney before proceeding.

Module 3 — Knowledge Check

Take a few minutes to reflect on the following questions before moving to Module 4. No answers are provided here. If you are uncertain about any item, return to the relevant section above before continuing.