When you’re in a state of financial distress it’s natural to become overwhelmed with the idea of spending any money at all. So it’s no big surprise that some people turn to “petition preparation services” to try to file their bankruptcy.
But these services can be as bad, if not worse, than trying to go to court by yourself. And as we’ve discussed before, attempting that can lead to disaster.
Here are a few reasons why petition preparation services are a terrible idea.
These services can’t provide you with legal advice.
And rest assured, you will need legal advice during the bankruptcy process.
You’ll need it to figure out what form of bankruptcy you need to file. You’ll need it to determine whether you’ve done something within the past couple of months that may make the timing all wrong for a petition. You’ll need it to determine which exemptions you can claim. You’ll need it if you’re wrapped up in a personal injury case. And you’ll need it if creditors challenge your petition for any reason.
The only thing petition preparers are legally allowed to do is to type up bankruptcy petitions. This means you could be talking to literally anyone who can type and who spent half a day putting together a cheap website. You definitely do not want to trust in their legal advice.
These preparers may not represent you in court.
You don’t just need advice when you’re preparing the petition. You will need an attorney to represent you in court, especially if you’re filing the far more complex Chapter 13 bankruptcy.
But things can go wrong even in a Chapter 7, and it’s vital for you to have a trained advocate who can navigate through these pitfalls.
You have no way of knowing if they made a mistake.
Even if the petition preparer doesn’t try to give you bad legal advice, he or she may still make a mistake. You could read the entire petition backwards and forwards without catching it.
You might catch it if they failed to list one of your assets. But you’re not going to catch it if they made a serious legal mistake. This could mean you make a serious mistake, and you’d never know it until you were facing the consequences.
And botched paperwork is distressingly common.
If they have made a mistake, you’ve got a lot to lose.
You might lose your home, car, or other property that you might have kept.
A creditor might manage to weasel his way out of being included in the discharge, which means that creditor is free to harass you even after the case is done.
In very severe cases, you could end up in jail for bankruptcy fraud you never meant to commit.
Don’t take chances.
Hire an attorney.