28 Feb A Website Can Be A Bankruptcy Lawyer
A website offering help over the internet in the form of software used to complete a bankruptcy filing is practicing law. Unless the website is run by a lawyer, its owner is violating the law by practicing without a license. The 9th Circuit Court of Appeals in the case of In re Reynoso, 477 F.3d 1117 (9th Cir. 2007) upheld the lower courts and made it clear that it is unlawful for a non-lawyer to provide software that makes legal decisions for a fee. This case and others are explored in more detail by St. Johns University law student Thomas Szaniawski in an excellent recent article entitled “Can Software Be a Bankruptcy Petition Preparer?“
The Reynoso decision is important to consumers in general and bankruptcy debtors in particular for two reasons. First, the matter was discovered because there were several errors in the bankruptcy schedules filed by the debtor Jayson Reynoso who used the “online bankruptcy engine” for a fee. Second, representations made by the website author were false and misleading.
It is understandable that a consumer with financial problems and limited resources would look to the least expensive alternative, in the case of Mr. Reynoso an online software program, to get help in filing a bankruptcy. However, bankruptcy is serious business. The bankruptcy law is a powerful tool for dealing with debt but it is complex and there are criminal penalties for some violations. When a bankruptcy case is filed it is particularly important that all schedules submitted to the court are accurate and complete. Lying to the bankruptcy court can land you in jail. Even if the failure to include all the required information or errors in the schedules is not criminal, it can lead to loss of the bankruptcy discharge.
It is entirely legal for an individual to prepare and file a bankruptcy petition and schedules without a lawyer. In fact, the official bankruptcy forms are available for free from the US Courts Website. However, each state has its own exemption laws and each bankruptcy court has its own local rules. This makes filing bankruptcy without advice from an experienced bankruptcy lawyer a little like taking out your own appendix without the help of a doctor. While it may be possible to do so, it is not recommended and probably will hurt like the dickens.
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