Letter From the US Trustee - Should I be Worried?

[Boldilocks]

We filed 5/2/16, had 341 meeting 6/8/16, Trustee's Report of No Distribution was entered the same day, Financial Management course requirement satisfied 6/15/16, and the status right now is "awaiting discharge". Thought we were home free... :-(

Then I received this letter this morning from the US Trustee regarding the software I used to prepare our BK paperwork. Should I be worried?

"The United States Trustee has certain administrative and investigative roles in all bankruptcy cases. On behalf of the US Trustee, this office is reviewing the above-referenced case under the provisions of 11 U.S.C. 110. Specifically, we are looking into the practices of the online petition preparer.

We note that when American Bankruptcy Online completed the petition and schedules for you, they didn't list that they had prepared it and charged a fee.

If possible, can you please provide us with the contact information for American Bankruptcy Online (including any staff name and account number) and also any receipts you have indicating the full amount you paid for the service."

When we were at the 341 meeting I was given a sheet to fill out asking questions about the software I had used - I filled it out to the best of my ability, but was not prepared for the questions. I didn't even get the name of the software right as I hadn't looked at it for months - it's American Bankruptcy Company - not the name I gave them in this letter. I can't log in to their site now to get my account number as my membership has expired - without paying a $39 renewal fee. I had to pay that fee a couple of times during the time I was preparing as it took me about 4 months to get everything together. I never spoke to any staff there or anything - just filled in the questions and printed out the petition paperwork.

[justbroke]

This is not an issue per se with you or your case. This is an issue because the Office of the United States Trustee (OUST) has been instructing Chapter 7 Panel Trustees to find out if petition preparers are following the law.

Petition preparers have been around for a while but they must adhere to the law. If your petition was prepared by someone else, especially for a fee, then it must be disclosed on Form 1 (at the bottom) and that preparer must attest that they provided no legal advice.

Provide what information you can for the UST. If necessary, call the person that is performing the investigation and give them details about what you recall. The OUST may be preparing a case against this American Bankruptcy Online (ABO) company and are trying to gather evidence. They may even require ABO to return any fees to you which you have paid.

[bcohen]

The way I read the posting, he made a mistake when listing the name of the company, and perhaps didn't even us a "paid petition preparer". It sounds like he used a software program to aid in preparation of his case documents, and that is not the same as paying a person or company to prepare them.

[justbroke]

I did as well bcohen but I also know that the Area 21 United States Trustee has been cracking down on those that claim that it's "electronically" done online. I used an "online" preparer and that which didn't work out. In my case, the service used a questionnaire and then their system "prepared" the forms.

It looks like "American Bankruptcy Company" owns "American Online Bankruptcy" and they take your information and, according to their advertising, "prepare 100% of everything you need for a complete bankruptcy filing". Since they use the word "prepare", I'm sure the UST may be interested to learn more about this process.

The UST may be out fishing and finds that software, which you don't own yourself, which generates the petition on your behalf is a transcription service and subject to the disclosure requirement. For some reason, the UST seems to be interested in this particular preparer. It may be nothing or it may be that the UST is building a case against this preparer. Absolutely nothing for the debtor to worry about.

Just my thoughts.

[Boldilocks]

The way I read the posting, he made a mistake when listing the name of the company, and perhaps didn't even us a "paid petition preparer". It sounds like he used a software program to aid in preparation of his case documents, and that is not the same as paying a person or company to prepare them.

This.
I just filled in the questions on the screen like you do with Turbo Tax. It was kind of similar actually. The questions on the sheet I was given were kind of confusing - like they were trying to get you to say you had help. I tried to answer them in a way that said I had no help, and no legal advice, but I used one of the many software programs available and prepared them myself.

BTW, I'm a she!

[Boldilocks]

I did as well bcohen but I also know that the Area 21 United States Trustee has been cracking down on those that claim that it's "electronically" done online. I used an "online" preparer and that which didn't work out. In my case, the service used a questionnaire and then their system "prepared" the forms.

It looks like "American Bankruptcy Company" owns "American Online Bankruptcy" and they take your information and, according to their advertising, "prepare 100% of everything you need for a complete bankruptcy filing". Since they use the word "prepare", I'm sure the UST may be interested to learn more about this process.

The UST may be out fishing and finds that software, which you don't own yourself, which generates the petition on your behalf is a transcription service and subject to the disclosure requirement. For some reason, the UST seems to be interested in this particular preparer. It may be nothing or it may be that the UST is building a case against this preparer. Absolutely nothing for the debtor to worry about.

Just my thoughts.

Thank you, you've set my mind at rest. There was a phone number at the bottom of the letter - I'll call them on Monday as well as sending a letter with anything on it that's helpful. I've found the best practice so far is just to be as open and honest as possibe and conceal nothing - and hopefully that will help with this too.

As the paperwork was accepted no problem, and the Trustee made his report of no distribution that same day, then it would seem that the paperwork was fine? I can;t fault it myself - they even provided any local forms that I needed - the clerk had them on hand to give me when we filed, and was surprised to see that they were already in the packet and filled in. She said a lot of filers miss them.

But they did make you pay a renewal fee every 30 days or so or they locked you out of your account which was irritating - it wasn't like a monthly fee, every so often it would just take you to a renewal screen and you had to pay to get to your paperwork. I think I ended up renewing about 3 times because I took a while getting everything together.

Maybe it's as simple as they couldn't find the software program because I misremembered it in the form I filled out? In any case - I'll update with anything that happens (if it happens) as this might be interesting to other pro se filers, right?

[justbroke]

I used a service like that as well and it may have been the same service. (I can't remember since that was in 2008.) Suffice it to say that regardless of whether you completed your petition and forms online using their software, the UST has been cracking down hard on any entity or person it believes is "preparing" petitions and not disclosing their participation and their fees on the petition (form B1).

I was poked with the same exact questions you were asked. I said I wasn't "helped" and that they didn't "provide legal advice" and that I did it myself. For some reason, they didn't believe me and kept poking. They were satisfied after some time. The Chapter 13 Trustee still wanted to know the name of the company. I don't think it went any further, but the UST is pretty much a pitbull when they sink their teeth into one of these online petition preparers.

They are interested in that particular company and are going to find out what's going on. It's a great question though. Are they are are they not a "paid petition preparer" under bankruptcy law.

[LadyInTheRed]

I checked the company's website. They have both a self-service software option and two preparation services. So, I would think that they are a paid petition preparer at least for the two preparation services.

Boldilocks, I agree that you have nothing to worry about. It is the company, not you, who is being investigated.