Protecting Debtors from Fraud and Abuse
U.S. Bankruptcy Court, Central District of California
An issue that arises frequently at Public Counsel's Bankruptcy Self-Help Desk involves debtors who have received incomplete or incompetent advice from paralegals and other bankruptcy petition preparers ("BPPs"), or from negligent or incompetent attorneys.
BPPs are not allowed to give legal advice and may only type up and print out the factual information provided by the debtor. Nevertheless, in many cases, BPPs engage in the unauthorized practice of law by providing legal advice to pro se debtors- and such advice is frequently incomplete or incorrect.
BPPs seldom provide debtors with the information to properly meet the host of requirements necessary to take a bankruptcy case successfully from filing to discharge. Debtors pay for a "service" that does little more than what they could have done on their own.
Worse yet, many debtors become the victims of outright fraud, paying large sums of money to con artists who disappear without having done any work for the debtor whatsoever.
At the Self-Help Desk, Public Counsel successfully assisted a victim of BPP fraud in recovering $6,000. Unfortunately, BPP abuse is extremely common. The Self-Help Desk staff works closely with the Office of the United States Trustee to track cases of BPP fraud, and assists individuals in filing fraud complaints in appropriate cases.