Risky Business? Bankruptcy Preparers vs. Bankruptcy Attorneys

The J. Bratton Davis United States Bankruptcy ...

Bankruptcy Preparers or Bankruptcy Attorneys?

The advertisements for bankruptcy preparers are starting to pop up online
and offline; but many debtors don’t understand the difference between
a bankruptcy preparer and a bankruptcy attorney. Many debtors simple want
the cheaper option without ever considering that in the long-term working
with a bankruptcy preparer could be quite costly.

Let’s take a look at some of the facts:

1.Bankruptcy preparers are NOT attorneys! A matter of fact, bankruptcy preparers are barred from giving legal advice
to debtors. That means that they cannot legally advise a debtor on whether
they should file
Chapter 7 bankruptcy or
Chapter 13 bankruptcy . They also can’t advise the debtor on how to protect their assets
in bankruptcy.

2.Bankruptcy preparers cannot attend the 341 meeting with the debtors because
they are not attorneys.
That means that a debtor who uses a bankruptcy preparer will need to face
the bankruptcy trustee and creditors without the help of a professional.
And since, as we mentioned in point number one, bankruptcy preparers are
not attorneys, they cannot even advise the debtor on how to handle the
341 meeting.

3.Bankruptcy preparers are not authorized to defend a debtor if a creditor
challenges their bankruptcy discharge.
With the recession still going on, many creditors are taking the time
to challenge more discharges. Debtors who use bankruptcy preparers will
be left to fend for themselves when creditors file lawsuits and/or argue
that they should not be allowed to discharge their debts. And this is
where using a preparer can be a money losing proposition. Smart debtors
will use a bankruptcy attorney so they can fight any possible creditor
attacks during bankruptcy.

By | 2017-12-13T03:20:43+00:00 February 3rd, 2011|Bankruptcy|Comments Off on Risky Business? Bankruptcy Preparers vs. Bankruptcy Attorneys