Dueprocessdenied
Petition Preparer Denied Due Process of Law
This is a case against a petition prepare that was filed by U.S. Trustee, Ira Bodenstein. Here, we present documents from the case and suggest that they be read from the beginning. By doing so, it is our opinion that any reasonable person will discern the Catch-22 method of the Trustee's complaint, in addition to his malicious perjury. (After reading the U.S. Trustee's Adversary Complaint, see transcript of Meeting of Creditors filed as an Exhibit with the petition preparer's Declaration.)
The petition preparer cooperated with the U.S. Trustee by providing him with requested forms and information. She had nothing to hide. In his adversary complaint, the U.S. Trustee used the forms and information against her by inferring that she was wrong to conduct a business preparing bankruptcy petitions.
Section 110 of the Bankruptcy Code is written badly. It's a Catch-22 statute. It is titled, "Penalty for persons who negligently or fraudulently prepare bankruptcy petitions."
When information is not provided by the customer/debtor, the petition preparer is accused of negligence. If the petition preparer enters the information provided by the customer/debtor, and that information is incorrect, the petition preparer is accused of negligence.
If customers do not value their property correctly, or omit property from the worksheet that the petition preparer types from, the petition preparer is accused of negligence.
If the petition preparer asks information to make sure that the information given to them is accurate, then the petition preparer is accused of practicing law without a license.
When interviewed, the petition preparer in this case stated that the customer came to her through a referral, (a real estate person), whose name she had not previously heard. It is her opinion that the couple was used to set her up. These are not sting operations or entrapments. Rather, they are people used by U.S. Trustees to deliberately omit information or request that the petition preparer performs an act, which is then used to allege that the petition preparer was negligent, and practiced law without a license.
It is apparent from the Exhibits that the U.S. Trustee attached to his complaint that they spend a large amount of time and effort searching for and targeting petition preparers. They do not look for bankruptcy cases that demonstrate where the petition preparer violated Section 110. Rather, they use the Meeting of Creditors for a fishing expedition to ask debtors if the petition preparer gave legal advice, and they will use the debtor's interpretation of that term as a basis for their complaint. Anything that debtors report petition preparers as saying is interpreted as giving legal advice.
The role of U.S. Trustees, in summary, is to perform administrative functions and supervise case trustees. Section 110 violates that jurisdiction, and provides U.S. Trustees with authority to investigate and prosecute privately owned businesses in a free enterprise system. It is one thing if a debtor suffers harm because of intentional error or misleading from the petition preparer. It's another thing to surf the internet for the web sites of petition preparers; search the yellow pages for advertising of petition preparers; then deceptively require that they submit the forms and agreements they use in conducting business. They analyze, scrutinize, and place the forms and agreements under a microscope to see if they can allege deceptive advertising or giving of legal advice. For example, in this case the U.S. Trustee alleged that because the petition preparer used pre-printed forms that attorneys also use, that she was practicing law without a license. By the Trustee's logic, using the same brand of cotton balls that doctors use is practicing medicine without a license.
We sincerely believe that it was not the Congress' intent to legislate Section 110 to give authority to U.S. Trustees to go on witch-hunts. Neither do we believe that the intent of Congress was to give bankruptcy judges authority to impersonate State Supreme Court Judges to decide what is the practice of law. It is time for the Congress to undo the damage. American voters hold legislators accountable.
In this case, the petition preparer was not given rights to due process of law. The court did not hold a pre-trial hearing. In fact, the court did not hold a hearing on the complaint and the answer to determine if it was going to hear or dismiss the complaint. The petition preparer came to court thinking it was a hearing on her answer to the Trustee's complaint and her request to dismiss his complaint. Instead, she found that her trial was actually taking place.
The attorney for the U.S. Trustee brought as his witness a paralegal named Maureen Gaber, who testified that she worked for him for 10 years. The petition preparer was not given an opportunity to cross-examine because Maureen left the courtroom after leaving the witness stand. At the end of the trial, the petition preparer asked the court to delay decision to give her opportunity to submit interrogatories and research the evidence provided by the Trustee's paralegal-witness. The court refused.
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