Bankruptcy petition preparers’ fees capped

Bankruptcy petition preparers can’t charge more than $100 for their services in the Eastern District of Michigan unless the Bankruptcy Court approves a higher fee.

And getting that approval under Administrative Order 10-21, issued April 20, 2010, apparently will not be a pro forma affair.

The order allows only a preparer to request more than the $100 “presumptive maximum allowable fee” by filing a motion and affidavit to justify the request. The affidavit must also include a statement that the debtor has reviewed the motion.

A hearing “shall” be scheduled unless the court determines otherwise.

All pro se debtors will get a copy of the order when they file their petitions. This tips them off that if they’ve paid a preparer more than $100, the court thinks that’s too much.

In capping the fee at $100, the court’s six judges explained that they:

have relied upon their collective experience concerning fees actually charged by petition preparers in this district, as well as the limited nature of the services that bankruptcy petition preparers may perform under Section 110 of the Bankruptcy Code and state law limitations on the unauthorized practice of law.

A preparer who charges more than the services are worth will be ordered to surrender the excess fee.


One thought on “Bankruptcy petition preparers’ fees capped

  1. When you are struggling with credit card and other debt to the point where you truly cannot make your regular monthly payments, the idea of declaring bankruptcy can be very appealing. After all, it looks like declaring bankruptcy gives you the chance to wipe the slate clean and start over. While this can be the basic effect of declaring bankruptcy, if you are eligible for the right kind, you need to look carefully at your situation before making this drastic decision.

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