Beware Bankruptcy Petition Preparers

When you are on the brink of bankruptcy, getting some much-needed advice and assistance can be a life-saver. But be careful who you trust. A Milwaukee area woman recently got busted for giving bad advice to filers in our area. 

Carolyn A. Word, who has also gone by the name Carolyn Dixon, may be criminally prosecuted for ignoring a 2010 order not to work as a bankruptcy petition preparer, and attempting to hide her post-2010 activity from the court. 

Who Are Bankruptcy Petition Preparers?

Bankruptcy petition preparers are non-attorneys who can — as their name suggests — help you prepare a bankruptcy petition. However, they are only typists. They are prohibited by law from giving legal advice. Petition preparers in the Eastern District of Wisconsin, which includes Milwaukee and the surrounding counties, may charge a maximum of $75 for their service. 

Word was previously barred from serving as a petition preparer, and fined because she overcharged low-income people for her services, and may have offered improper legal advice. However, it appears that she did not stop preparing petitions. Word got caught because she told one of her clients to lie to the court, and hide the fact that she had provided assistance. 

While there is nothing wrong with working with a bankruptcy petition preparer if all you need is someone to help you type up your petition, you should be careful about who you work with and be wary of any advice they try to give you. Working with an experienced bankruptcy attorney is a much better option. 

An attorney can do much more than help you fill out the piles of paperwork a bankruptcy requires. 

The first thing an attorney will do is help you figure out if bankruptcy is truly the best option for you, or if other actions could be taken to help get you back on track. 

If bankruptcy is the best path forward, the next step is figuring out which type of bankruptcy is right for you. Most people file under Chapter 7 or Chapter 13. A Chapter 7 bankruptcy is a traditional liquidation — your assets are sold off, the proceeds are used to pay off your debts, and most remaining debts are forgiven. A Chapter 13 bankruptcy is more like a corporate reorganization — you enter into a court-supervised repayment plan, and after a few years you are caught up on your payments and some debts are forgiven. An experienced attorney can help you determine which chapter it would be best for you to file under. 

The Benefits of Working with a Bankruptcy Attorney

Once you have filed your bankruptcy petition with the court, your attorney will work as your advocate and liaison with the court. You will never have to show up to court alone or answer questions without someone who is on your side explaining them to you. 

Perhaps more importantly, your attorney becomes a shield between you and your creditors. Once you obtain legal representation, you can tell your creditors they must speak to your lawyer instead of contacting you directly. 

The benefits of working with an experienced bankruptcy attorney are many. While others may offer you help with your bankruptcy case, what they can do for you is extremely limited. You should be suspicious of any non-attorney that says they can help you file for bankruptcy.