Bankruptcy Petition Preparer Requirements by State

Bankruptcy petition preparers operate within a narrowly defined federal statutory framework — 11 U.S.C. § 110 — that sets out what a BPP may do, what they must disclose, what fees they may charge, and what conduct subjects them to sanctions. That framework applies nationally. But how it is interpreted, what additional requirements exist, and how vigorously it is enforced varies meaningfully by jurisdiction.

This guide covers the federal statutory framework under 11 U.S.C. § 110 and then addresses the state-by-state and district-by-district variations that determine how a BPP practice actually functions in different jurisdictions.

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The Federal Framework: 11 U.S.C. § 110

Section 110 of Title 11 — enacted as part of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) — is the single statute that defines the bankruptcy petition preparer profession in federal law. Every BPP must know this statute before preparing their first case.

Who Is a Bankruptcy Petition Preparer?

Section 110(a)(1) defines a bankruptcy petition preparer as "a person, other than an attorney for the debtor or an employee of such attorney, who prepares for compensation any document for filing" in a bankruptcy case. The definition is functional: if you are paid to prepare a bankruptcy document for filing, you are a BPP subject to the requirements of § 110, regardless of what you call yourself.

What a BPP Is Prohibited From Doing

The statute draws a firm line between document preparation and the practice of law. Under § 110(e)(2), a BPP is prohibited from:

• Offering a potential debtor any legal advice, including advising on whether to file bankruptcy, which chapter to file, or how to value, exempt, or schedule assets and liabilities
• Using the word "legal" in any advertising, business name, or in any document prepared by the preparer
• Accepting any payment from a client for court fees — the BPP may not serve as a conduit for court filing fees
• Advertising or representing that they are anything other than a document preparer (any implication of legal services or attorney equivalence is prohibited)

These prohibitions are not interpretive guidance. They are statutory and enforced by federal courts with direct sanction authority over BPPs appearing before them.

Required Disclosures

Section 110(b) requires that BPPs include their full name, address, and Social Security number (or tax identification number) on every document they prepare for filing. The SSN requirement has been contested in court on privacy grounds, but the statute as written requires it, and compliance is the professional standard.

BPPs must also provide the debtor with a copy of all documents prepared, and must disclose their fee to the debtor in a written statement before any services are performed (§ 110(h)). The fee must also be disclosed in the petition documents themselves.

Fee Limitations

Section 110(h) subjects BPP fees to court review. A debtor or the U.S. Trustee may file a motion with the bankruptcy court requesting that the court review the reasonableness of the BPP's fee. If the court finds the fee unreasonable, it may order disgorgement of all or part of the fee paid. Courts have found fees unreasonable in cases where the fee was disproportionate to the services provided, or where the BPP engaged in conduct that gave the appearance of legal services.

The statute does not establish a specific dollar cap — "reasonableness" is assessed by the court based on the specific market and services. In practice, BPP fees that have been challenged and reduced by courts tend to be in markets where courts have established implicit caps through prior decisions.

Penalties for Violations

Section 110 contains a comprehensive penalty structure. Courts may:

• Impose fines of up to $500 per failure to comply with a specific requirement (higher for repeated violations)
• Order disgorgement of all fees collected in connection with a case where violations occurred
• Enjoin a BPP from practicing — permanently — upon finding a pattern of violations or a single egregious violation
• Certify matters for criminal prosecution in cases involving fraudulent conduct, unauthorized practice of law, or filing fee misappropriation

These are federal court orders with federal enforcement mechanisms. They are not administrative penalties subject to negotiation. The penalty structure reflects Congress's intention that courts have robust tools to protect debtors from incompetent or dishonest BPPs.

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Bankruptcy Court Districts: Where Variation Lives

While § 110 applies nationally, how it is implemented — and how enforcement posture varies — is a district-by-district reality. The United States has 94 federal judicial districts, each with its own bankruptcy court. Each district has local rules, standing orders, and enforcement patterns that directly affect BPP practice.

District Registration Requirements

Some bankruptcy courts require BPPs to register with the court before filing any cases. Registration typically involves:

• Filing a notice of intent to practice as a BPP in the district
• Providing identifying information required by § 110(b)
• In some districts, filing a disclosure of fee schedule with the court

Districts with active BPP registration or disclosure requirements include:

• Southern District of New York — BPPs are required to file a disclosure statement with the court at the commencement of any case in which they have prepared documents
• Eastern District of California — has standing orders regarding BPP disclosures; BPPs who have had prior sanctions in the district face heightened scrutiny
• District of Arizona — has local rules addressing BPP practice and fee disclosure requirements

The absence of an explicit district-level BPP registration requirement does not mean no requirements exist. Every district has adopted local rules under Fed. R. Bankr. P. 9029 that may affect BPP operations. Check the local rules of the specific district where you intend to practice before filing your first case.

Districts With Active Enforcement Posture

Some bankruptcy courts have developed a reputation for aggressive § 110 enforcement, routinely reviewing BPP fees, and referring matters to the U.S. Trustee Program's regional offices for investigation. The Office of the United States Trustee has statutory authority under 28 U.S.C. § 586 to supervise BPP conduct and to bring enforcement actions.

Jurisdictions where BPP enforcement has historically been more active:

• Central and Southern Districts of California
• Southern District of Florida
• Northern District of Georgia
• Northern District of Texas

This is not to suggest that BPPs in these districts should not practice — it means that practitioners must maintain clean, fully compliant operations, because courts in these districts scrutinize the disclosures and fee agreements in cases with BPP involvement.

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State-Level Considerations

Bankruptcy is exclusively federal jurisdiction under Article I, § 8, cl. 4 of the U.S. Constitution — states cannot regulate bankruptcy law itself. However, state law affects BPP practice in several important ways.

Unauthorized Practice of Law (UPL) by State

The UPL prohibition is embedded in § 110 (BPPs may not give legal advice), but state UPL statutes and bar association enforcement add another layer. Several states have actively pursued non-attorney providers — including BPPs — for conduct that the state bar characterizes as unauthorized practice of law, even in bankruptcy contexts.

States with notable UPL enforcement history involving document preparers:

• California — State Bar actively investigates UPL complaints; separate California Business and Professions Code provisions address "unlawful practice of law" independently of § 110
• Florida — Florida Bar pursues UPL complaints vigorously; The Florida Bar v. Brumbaugh (1978) is the leading Florida case on document preparer authority
• Texas — State Bar maintains an active UPL committee; Texas Penal Code § 38.123 criminalizes unauthorized practice of law as a Class A misdemeanor
• New York — OCA Unauthorized Practice of Law program actively monitors and pursues complaints

In these states, the boundary between document preparation and legal advice must be maintained with particular discipline. Even innocuous statements — "most people in your situation file Chapter 7" — can be characterized as legal advice in a state with aggressive UPL enforcement.

State Document Preparer Laws

Some states have enacted separate legal document preparer licensing laws that apply to bankruptcy petition preparers in addition to (or alongside) § 110:

Arizona — Ariz. Rev. Stat. § 7-201 et seq. establishes a legal document preparer registration program administered by the Supreme Court of Arizona. Individuals who prepare legal documents — including bankruptcy petitions — for compensation must register as a Certified Legal Document Preparer (CLDP) or operate under a licensed attorney's supervision. The certification requires passing an examination administered by the State Bar of Arizona.

Washington — Washington has enacted a Limited License Legal Technician (LLLT) program, though its scope and current status should be confirmed directly with the Washington State Bar Association, as the program has been subject to revision.

California — California Business and Professions Code § 6400 et seq. regulates "legal document assistants" (LDAs), a category that includes BPPs. LDAs must register with their county, post a $25,000 bond, and comply with client disclosure requirements under the LDA statute — separate from and in addition to federal § 110 requirements.

Florida — Florida does not have a separate document preparer licensing program; BPPs in Florida operate solely under federal § 110 and Florida Bar UPL rules.

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State-by-State Snapshot for BPP Practice

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Practical Steps Before You Begin

Regardless of the state in which you intend to practice, the pre-launch checklist for a compliant BPP practice includes:

1. Read 11 U.S.C. § 110 in full — not a summary, the statute itself. It is approximately 1,500 words and is the governing document for your profession.
2. Review your district's local bankruptcy rules — available at the court's official website; search for "local rules" and any standing orders or general orders addressing BPP practice
3. Confirm state LDP licensing requirements — if you are in Arizona or California, compliance with state law is required in addition to federal § 110
4. Prepare a compliant client agreement — your written fee disclosure and engagement agreement must satisfy § 110(h) and any applicable state requirements before you engage your first client
5. Research the U.S. Trustee Program's regional office for your district — the U.S. Trustee website lists regional offices and contact information; some offices publish guidance for BPPs

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How SecureServe Academy™ Can Help

The Bankruptcy Petition Preparer Playbook™ covers the full federal framework under § 110, district-by-district compliance considerations, compliant client agreements, fee disclosure protocols, and the operational structure for a professional BPP practice.

The Bankruptcy Petition Preparer career path at SecureServe Academy™ walks through the practical steps for launching and running a BPP practice from initial compliance setup through first-client acquisition.

If you are evaluating whether bankruptcy petition preparation is the right professional direction, the Professional Pathway Guide™ provides a structured comparison across six career tracks.