I came across this interesting order issued on Tuesday, April 20th by the US Bankruptcy Court for the Eastern District of Michigan. The Administrative Order caps the maximum allowable fee charged by a bankruptcy petition preparer in any case to just $100.
If the preparer seeks fees higher than $100, the preparer must file a motion, along with an affidavit setting forth the facts justifying the increase in fees, and the motion must be filed within 14 days of the filing of the case.
To let debtors know about this order, the court clerk is to give a copy of the Administrative Order to all pro se debtors when they file their case. If preparers charges fees “in excess of the value of the services rendered”, they shall be subject to sanctions which can include disallowance of the fees.
Over the years, I’ve commented from time to time about petition preparers who prey on debtors, charge them outrageous fees, and then leave them in worse shape. This order is likely to be a disincentive for any scam artist hoping to shake a debtor down and fly under the radar of the Court and the United States Trustee.
The full test of the order is below:
- Injunction Issued against Massachusetts Petition Preparer
- Why Bankruptcy Lawyers Require Fees Before Filing
- 10th Circuit: Legal Interest Acquired Post-petition is Property of the Estate
- House Passes Bill, Filing Fees Increasing
- Late Filing of Documents = Dismissal