New Jersey allows a petition preparer to help you with a bankruptcy petition. A preparer's job is to assist you in drafting a petition to request that the court allow you to declare bankruptcy. Although the state allows a preparer to help you, it limits the amount he can charge and your remedies against him if he does a bad job.
Any person or corporation who is not an attorney or working for an attorney can be a bankruptcy petition preparer. New Jersey does not require that the preparer have a legal background or experience working with bankruptcy courts. Despite this, most preparers have worked with bankruptcies previously.
Duties of a Petition Preparer
A preparer helps you draft the initial document to file with the bankruptcy court. All bankruptcies are handled by federal courts, which operate in courthouses throughout the nation. Because they are a federal issue, bankruptcy petitions are largely the same, depending on the type of bankruptcy you file. A preparer inserts your information into the appropriate form, complying with court guidelines. Because of this, preparers are sometimes referred to as "typing services."
Because they are decided by federal courts, New Jersey has no specific laws regarding bankruptcies, but instead follows federal laws. Federal law allows you to use a preparer to help draft the petition, but limits them to charging a maximum of $150. This charge is separate from any filing fees the federal court charges.
Federal law limits your remedies against a preparer. If the preparer you hire does a poor job and your petition is rejected, you have no legal means of recourse to have the amount you paid him returned. This is because the courts hold you responsible for all aspects of your petition, regardless of who typed it.
Advice from Petition Preparers
Preparers are not allowed to provide you with any legal advice. This means that they cannot tell you what type of bankruptcy petition to file, what assets to include in it, what will happen to your residence during or after the proceeding, what debts you may discharge through a bankruptcy, what assets you may legally exclude, what assets you may have to sell or give away in your bankruptcy, what tax liability you may incur from declaring or what a creditor can claim against you in an attempt to receive full payment. This limitation reinforces the idea of a preparer being a typing service.
A preparer can provide you with general information about bankruptcy proceedings, such as general court proceedings and how long the average bankruptcy takes to complete. This is because the federal court does not consider this type of advice to be legal advice. Because it is general advice, however, you have no legal recourse if the preparer makes an incorrect statement.
Reasons to Hire a Preparer
A preparer helps you draft a petition containing the necessary information and makes your petition legible. If the preparer you hire does his job well, you should be able to take your petition to court and file it immediately after it is typed. Never hire a preparer without researching their qualifications or comparing their experience to that of other preparers. Check for any complaints lodged against preparers. The Better Business Bureau and federal court should have complaint records.
Obtain Legal Advice
Seek legal assistance with completing and filing your bankruptcy petition. A lawyer will review the federal laws, discuss the typical bankruptcy court proceedings and provide you with legal advice about how and when to file for your petition.