North Carolina Petition Preparer Guidelines

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In North Carolina, a petitioner preparer is a third party who creates a bankruptcy petition on your behalf for payment. They are not an attorney or someone who works for an attorney. The state allows the use of prepares, but limits your legal remedies if they do not provide adequate services.

North Carolina allows any individual or corporation to act as a petitioner preparer. There is no requirement they have legal experience or to have previously worked in a bankruptcy-related field. Despite this, the majority of preparers have some experience.  

Duties of a Petition Preparer

A preparer generates a bankruptcy petition for you that conforms to federal guidelines. All bankruptcy proceedings are governed by federal courts, which means that the required petition is the same nationwide, depending on the chapter of the Bankruptcy Code under which you file. The preparer inputs your information in a pre-formatted petition. Preparers are sometimes referred to as "typing services."

North Carolina follows federal bankruptcy laws. Preparers in the state are limited to charging a maximum of $150 to create a petition. This fee is separate from any federal court filing fees you may pay to submit your petition.

The federal government, and therefore the state, does not allow you any remedies if your preparer does a bad job. While you can sue him for failing to property create your petition, doing so usually costs much more than $150. If your petition is dismissed by the court for any reason related to its form or content, you are unlikely to recover the preparer’s fee.

No Advice

Federal law prohibits petitioners from answering any legal questions you may have. This means that they cannot discuss your decision to file for bankruptcy, what assets to include in your bankruptcy, the type of bankruptcy to claim and file, what debts might remain after the court approves your bankruptcy or what will happen to your home after the proceeding. They cannot discuss which debts may be discharged under the particular Code number you file under, how filing will affect your taxes, what claims a creditor may make against you and what you may possibly owe after the bankruptcy is finalized. These facts reinforce the idea that a preparer is simply a typing agency.

A preparer can advise you about the general aspects of filing for bankruptcy, such as how long the entire process may take and the court proceedings. The federal government and North Carolina, however, view this type of advice as professional and not legal-professional advice. This means that it is treated similar to any statements made by an employee (the preparer) to a client (you) and as such that you technically have no legal basis for relying on it. You therefore have no recourse if the preparer is wrong.

Reasons to Hire a Preparer

A preparer can assist you with conforming your petition to federal guidelines. He will ensure that it contains all necessary information and is in the correct format. When they are done with the job, you should be able to immediately file your petition at the local federal court.

Never hire a preparer without doing some research. Compare multiple preparers' experience and any complaints against them. You should be able to find complaints at your federal bankruptcy court or Better Business Bureau.

Getting Legal Advice

Seek legal advice with your bankruptcy petition. A lawyer will review the federal laws and assist you in drafting and submitting your petition.

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