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BANKRUPTCY · UNITED STATES CODE
USC § 110. Penalty for persons who negligently or fraudulently prepare
(a) In this section—
(1) "bankruptcy petition preparer"
means a person, other than an attorney for
the debtor or an employee of such attorney under the direct supervision of
such attorney, who prepares for compensation a document for filing;
(2) "document for filing" means a
petition or any other document prepared for filing by a debtor in a United
States bankruptcy court or a United States district court in connection with
a case under this title.
(1) A bankruptcy petition preparer who prepares a
document for filing shall sign the document and print on the document the
preparer’s name and address. If a bankruptcy petition
preparer is not an individual, then an officer, principal, responsible
person, or partner of the bankruptcy petition preparer shall be required
(A) sign the document for filing; and
(B) print on the document the name and
address of that officer, principal, responsible person, or partner.
(A) Before preparing any
document for filing or accepting any fees from a debtor, the bankruptcy
petition preparer shall provide to the debtor a written notice which shall
be on an official form prescribed by the Judicial Conference of the United
States in accordance with rule
9009 of the Federal Rules of Bankruptcy Procedure.
(B) The notice under subparagraph (A)--
(i) shall inform the debtor in simple language that a bankruptcy
petition preparer is not an attorney and may not practice law or give
(ii) may contain a description of examples of legal advice that a
bankruptcy petition preparer is not authorized to give, in addition to
any advice that the preparer may not give by reason of subsection
(I) be signed by the debtor and, under penalty of perjury, by the
bankruptcy petition preparer; and
(II) be filed with any document for filing.
(1) A bankruptcy petition preparer who prepares a
document for filing shall place on the document, after the preparer’s
signature, an identifying number that identifies individuals who prepared
(A) Subject to subparagraph (B), for
purposes of this section, the identifying number of a bankruptcy
petition preparer shall be the Social Security account number of each
individual who prepared the document or assisted in its preparation.
(B) If a bankruptcy petition
preparer is not an individual, the identifying number of the bankruptcy
petition preparer shall be the Social Security account number of the
officer, principal, responsible person, or partner of the bankruptcy
(d) A bankruptcy petition
preparer shall, not later than the time at which a document for filing is
presented for the debtor’s signature, furnish to the debtor a copy of the
(1) A bankruptcy petition preparer shall not
execute any document on behalf of a debtor.
(A) A bankruptcy petition
preparer may not offer a potential bankruptcy debtor any legal advice,
including any legal advice described in subparagraph (B).
(B) The legal advice referred to in
subparagraph (A) includes advising the debtor--
(I) to file a petition under this title; or
(II) commencing a case under chapter
(ii) whether the debtor's debts will be discharged in a case under
(iii) whether the debtor will be able to retain the debtor's home,
car, or other property after commencing a case under this title;
(I) the tax consequences of a case brought under this title; or
(II) the dischargeability of tax claims;
(v) whether the debtor may or should promise to repay debts to a
creditor or enter into a reaffirmation agreement with a creditor to
reaffirm a debt;
(vi) concerning how to characterize the nature of the debtor's
interests in property or the debtor's debts; or
(vii) concerning bankruptcy procedures and rights.
(f) A bankruptcy petition
preparer shall not use the word "legal" or any similar term in any
advertisements, or advertise under any category that includes the word
"legal" or any similar term.
(g) A bankruptcy petition
preparer shall not collect or receive any payment from the debtor or on behalf
of the debtor for the court fees in connection with filing the petition.
(1) The Supreme Court may
promulgate rules under section
2075 of title 28, or the Judicial Conference of the United States may
prescribe guidelines, for setting a maximum allowable fee chargeable by a
bankruptcy petition preparer. A bankruptcy petition preparer shall notify
the debtor of any such maximum amount before preparing any document for
filing for a debtor or accepting any fee from the debtor.
(2) A declaration under
penalty of perjury by the bankruptcy petition preparer shall
be filed together with the petition, disclosing any fee received from
or on behalf of the debtor within 12 months immediately prior to the filing
of the case, and any unpaid fee charged to the debtor. If
rules or guidelines setting a maximum fee for services have been promulgated
or prescribed under paragraph (1), the declaration under this paragraph
shall include a certification that the bankruptcy petition preparer complied
with the notification requirement under paragraph (1).
(A) The court shall disallow and order the
immediate turnover to the bankruptcy trustee any fee referred to in
paragraph (2) found to be in excess of the value of any services--
(i) rendered by the bankruptcy petition preparer during the 12-month
period immediately preceding the date of the filing of the petition; or
(ii) found to be in violation of any rule or guideline promulgated or
prescribed under paragraph (1).
(B) All fees charged by a bankruptcy
petition preparer may be forfeited in any case in which the bankruptcy
petition preparer fails to comply with this subsection or subsection
(C) An individual may exempt any funds
recovered under this paragraph under section
(4) The debtor, the trustee,
a creditor, the
United States trustee (or the bankruptcy administrator, if any) or the
court, on the initiative of the court, may file a motion for an order
under paragraph (2).
A bankruptcy petition preparer shall be fined not more than $500 for each
failure to comply with a court order to turn over funds within 30 days of
service of such order.
(1) If a bankruptcy petition
preparer violates this section or commits any act that the court finds to be
fraudulent, unfair, or deceptive, on the motion of the debtor, trustee,
United States trustee (or the bankruptcy administrator, if any), and after
notice and a hearing, the court shall order the bankruptcy petition preparer
to pay to the debtor--
(A) the debtor’s actual damages;
(B) the greater of--
(i) $2,000; or
(ii) twice the amount paid by the debtor to the bankruptcy petition
preparer for the preparer’s services; and
(C) reasonable attorneys’ fees and costs
in moving for damages under this subsection.
(2) If the trustee or creditor moves for damages
on behalf of the debtor under this subsection, the bankruptcy petition
preparer shall be ordered to pay the movant the additional amount of $1,000
plus reasonable attorneys’ fees and costs incurred.
(1) A debtor for whom a bankruptcy petition
preparer has prepared a document for filing, the trustee, a creditor, or the
United States trustee in the district in which the bankruptcy petition
preparer resides, has conducted business, or the United States trustee in
any other district in which the debtor resides may bring a civil action to
enjoin a bankruptcy petition preparer from engaging in any conduct in
violation of this section or from further acting as a bankruptcy petition
(A) In an action under paragraph (1), if the
court finds that—
(i) a bankruptcy petition preparer has—
(I) engaged in conduct in violation of this section or of any
provision of this title;
(II) misrepresented the preparer’s experience or education as a
bankruptcy petition preparer; or
(III) engaged in any other fraudulent, unfair, or deceptive
(ii) injunctive relief is appropriate to prevent the recurrence of
the court may enjoin the bankruptcy petition preparer from engaging in
(B) If the court finds that a bankruptcy
petition preparer has continually engaged in conduct described in
subclause (I), (II), or (III) of clause (i) and that an injunction
prohibiting such conduct would not be sufficient to prevent such person’s
interference with the proper administration of this title, has
not paid a penalty imposed under this section, or
failed to disgorge all fees ordered by the court the court may
enjoin the person from acting as a bankruptcy petition preparer.
(3) The court, as part of its
contempt power, may enjoin a bankruptcy petition preparer that has failed to
comply with a previous order issued under this section. The injunction under
this paragraph may be issued on the motion of the court, the trustee, or the
United States trustee (or the bankruptcy administrator, if any).
The court shall award to a debtor, trustee, or creditor that brings a
successful action under this subsection reasonable
attorneys' fees and costs of the action, to be paid
by the bankruptcy petition preparer.
(k) Nothing in this section shall be construed to
permit activities that are otherwise prohibited by law, including rules and
laws that prohibit the unauthorized practice of law.
(1) A bankruptcy petition preparer who fails to
comply with any provision of subsection
may be fined not more than $500 for each such failure.
(2) The court shall triple the amount of a fine
assessed under paragraph (1) in any case in which the court finds that a
bankruptcy petition preparer--
(A) advised the debtor to exclude assets or
income that should have been included on applicable schedules;
(B) advised the debtor to use a false Social
Security account number;
(C) failed to inform the debtor that the
debtor was filing for relief under this title; or
(D) prepared a document for filing in a
manner that failed to disclose the identity of the bankruptcy petition
(3) A debtor, trustee, creditor, or United States
trustee (or the bankruptcy administrator, if any) may file a motion for an
order imposing a fine on the bankruptcy petition preparer for any violation
of this section.
(A) Fines imposed under this subsection in
judicial districts served by United States trustees shall be paid to the
United States trustee, who shall deposit an amount equal to such fines in
a special account of the United States Trustee System Fund referred to in section
586(e)(2) of title 28. Amounts deposited under this subparagraph shall
be available to fund the enforcement of this section on a national basis.
(B) Fines imposed under this subsection in
judicial districts served by bankruptcy administrators shall be deposited
as offsetting receipts to the fund established under section
1931 of title 28, and shall remain available until expended to
reimburse any appropriation for the amount paid out of such appropriation
for expenses of the operation and maintenance of the courts of the United