Maximum allowable charge!

Bankruptcy Code 11 U.S.C § 110 regulates bankruptcy petition preparers who are not attorneys and assists debtors in filing a voluntary bankruptcy petition or helps in preparing any forms filed in connection with such cases. These guidelines and regulations are the rules of conduct for bankruptcy petition preparers.

11 U.S.C. 110 does not however specifically suggest the maximum amount Bankruptcy Petition Preparers can charge per each petition they prepare. Each Bankruptcy Court usually designates a max amount that a preparer in that district can charge to prepare a bankruptcy petitions. However, some Bankruptcy courts DO NOT designate a maximum amount that a preparer can charge. If that Bankruptcy Court does not designate a maximum amount that a preparer can charge, NABPP recommends that   charging $200.00 is usually a safe amount.  Additionally, the fee amount that the bankruptcy petition preparer can charge is separate from the filing fee that the client must pay the Bankruptcy Court to file their petition. Remember, the preparer can only get paid to prepare the bankruptcy; the preparer cannot file the petition for the debtor. The preparer cannot accept any other fees for the preparer dealing directly with the preparation of the debtor’s bankruptcy petition. The filing fee for the debtor’s bankruptcy is to be paid directly to the district court at the time of the filing.

Below are some examples of what different Bankruptcy Courts allow to be charged.

-          The Northern District of California maximum allowable charge for a bankruptcy petition preparer to charge is $150.

-          The Eastern District of Michigan maximum allowable charge for a bankruptcy petition preparer to charge is $100.

-          The Northern District Ohio maximum allowable charge for a bankruptcy petition preparer to charge is $125.

As you can see each District has a different maximum allowable amount to be charged. Remember, if the Bankruptcy Court in your area does not designate a max amount a preparer can charge, then $200.00 is usually a safe amount allowable by the court. However, to be sure that the Bankruptcy Court in your area does not give a max amount you can charge, make sure you do you research so you do not have problems and are forced to give a certain amount of your hard earned money back to the debtor. 

Assets Assets Assets!

Assets.

First let’s look at the definition of asset, which is an item of value that is owned by a person, company, etc.

Now let us look at how the definition changes when it is involved with a bankruptcy. It is still an item of value owned by a person, company, etc. but is now something that will be liquidated to pay off creditors before all the debts are wiped clean.

It is now time to look at why assets are so important in a bankruptcy. In order to get a discharge you must be honest and open when it is time to list everything on your bankruptcy papers, from assets and all of your debts. And again, this is because if you do have assets that can be liquidated and dispersed amongst your creditors then the Trustee needs to know this.

There are bigger problems than not getting a discharge when you don’t disclose your assets in a bankruptcy. You will have to turn over the property by law, so the Trustee can sell them and pay creditors. If your Trustee finds the assets after the fact of being granted a discharge, the Trustee then can ask the court to revoke your discharge. This can happen even after one year after the date your debts were discharged. Also if you do not disclose assets then any debts that were listed in your bankruptcy when  your discharge was denied or even revoked will still be owed.

Last but not least and certainly worse, is you could be criminally charged for not disclosing assets. (see section 11 USC 512)  When you sign your bankruptcy schedules listing your assets under penalty of perjury this is a serious matter. When stating that those papers are true and accurate, the penalty for making a false statement or concealing property (assets) is a fine of up to $500,000 or imprisonment for up to five years, or both.

With this being said, think twice before you decide to not disclose/hide assets when filing for a bankruptcy.  

This is not intended as legal advice, if seeking legal advice please consult your legal advisor.