Learn the difference between what a bankruptcy lawyer and a bankruptcy petition preparer can do.
Bankruptcy laws don’t require you to hire anyone to help you file for bankruptcy. But if you need help with the process, you might be wondering if you should hire a bankruptcy attorney or a bankruptcy petition preparer. In general, an attorney will handle your case from start to finish and give you legal advice along the way. In contrast, a bankruptcy petition preparer can only function as a typing service and prepare your bankruptcy forms under your strict direction.
What Services Does a Bankruptcy Attorney Provide?
Bankruptcy lawyers are attorneys who regularly handle bankruptcy cases as part of their practice. Just like lawyers who specialize in other practice areas, bankruptcy attorneys must be licensed by the state bar to practice law.
If you decide to hire a bankruptcy lawyer, it’s his or her responsibility to guide you through the entire bankruptcy process. This means that a bankruptcy attorney will:
- advise you on whether bankruptcy is in your best interest
- tell you what type of case you should file (learn more about Chapter 7 and Chapter 13 bankruptcy)
- prepare your bankruptcy paperwork and file your case
- represent you at all bankruptcy hearings (such as the meeting of creditors)
- provide you with legal advice throughout the process.
What Services Does a Bankruptcy Petition Preparer Provide?
A bankruptcy petition preparer is basically a non-attorney typing service. In general, most petition preparers have access to bankruptcy software programs that allow them to efficiently generate and prepare the necessary bankruptcy forms under your direction and guidance. This was more of a benefit in the past when you couldn't get bankruptcy forms online. Today, however, you can access fillable and printable offical bankruptcy forms from the website of the U.S. Courts (see below).
Because bankruptcy petition preparers are not attorneys, they are not allowed to:
- advise you on what type of bankruptcy is right for you
- tell you how to complete the bankruptcy forms
- represent you at bankruptcy hearings
- tell you what debts you can discharge in bankruptcy
- tell you which exemptions you should claim, or
- provide advice on any other legal matters relating to your bankruptcy filing.
This means that a bankruptcy petition preparer will only type the forms according to the information you provide. You will still have to do your own research regarding how bankruptcy laws work, which exemptions you should claim, which debts you can discharge, and all other aspects of filing for bankruptcy.
Reasons to Hire a Bankruptcy Attorney
When you hire a bankruptcy attorney, he or she will handle the legal aspects of your case from start to finish. This means that all you will really have to do is answer your attorney’s questions truthfully, provide the information and documentation he or she requires, and make sure to attend all mandatory bankruptcy hearings. Because your attorney understands how bankruptcy laws work, he or she will advise and guide you through the entire process.
For this reason, there is generally no downside to hiring a bankruptcy attorney other than cost. Because a bankruptcy attorney can provide you with legal services that a bankruptcy petition preparer can’t, hiring a lawyer will cost you significantly more than hiring a petition preparer.
Cost of hiring a bankruptcy attorney. Generally, bankruptcy attorney fees depend on several factors including the type of bankruptcy you want to file and the difficulty of your case. But you can expect to pay anywhere from $500 to $3,500 for a Chapter 7 and $2,500 to $6,000 for a Chapter 13 bankruptcy. (Learn more about average bankruptcy attorney fees.)
Reasons to Hire a Bankruptcy Petition Preparer
If you are willing to put in the necessary time and research, you may be able to file a simple Chapter 7 bankruptcy without an attorney. If you want to file on your own, you can fill out the required forms and print them out from the Unites States Courts’ website. In most courts, you'll also have to file some additional local forms.
If you don’t have access to a computer or don’t have the time to type the forms yourself, hiring a bankruptcy petition preparer can make sense. But remember that you will still have to do the legal research and gather the information necessary to complete the forms.
The petition preparer will only type the information you provide and can’t give advice on how to complete the forms. For this reason, bankruptcy petition preparers charge significantly lower fees than bankruptcy lawyers (typically $100 to $200). Some courts limit the amount that petition preparers are allowed to charge. For example, in the Northern District of California, petition preparers cannot charge more than $150.
Unfortunately, some bankruptcy petition preparers charge significantly more than $200, sometimes as much as an attorney.