Jose L. Rojero and Martina Rojero

1Section 110(b)(2) provides:
(A) Before preparing any document for filing or accepting any fees from a debtor, the bankruptcy
petition preparer shall provide to the debtor a written notice which shall be on an official form
prescribed by the Judicial Conference of the United States in accordance with Rule 9009 of the
Federal Rules of Bankruptcy Procedures.
(B) The notice under subparagraph (A) –
(I) shall inform the debtor in simple language that a bankruptcy petition preparer is not an
attorney and may not practice law or give legal advice;
(ii) may contain a description of examples of legal advice that a bankruptcy petition
preparer is not authorized to give . . . ; and
(iii) shall --
(I) be signed by the debtor and, under penalty of perjury, by the bankruptcy
petition preparer; and
(II) be filed with any document for filing.
11 U.S.C. § 110(b)(2).
Ms. Adams did, in fact, prepare and file the notice required under 11 U.S.C. § 110(b)(2), and the
United States Trustee has withdrawn his request for sanctions based on an alleged violation of
this section.
1
UNITED STATES BANKRUPTCY COURT
DISTRICT OF NEW MEXICO
In re: 	JOSE ROJERO and 	No. 7-07-13204 MR
MARTINA ROJERO,
Debtors.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
THIS MATTER is before the Court on the United States Trustee’s Motion for Order
Imposing Sanctions Against Bankruptcy Petition Preparer Pursuant to 11 U.S.C. § 110 (“Motion
for Sanctions”). The Motion for Sanctions requests the Court to impose sanctions against
Tammy Adams, the bankruptcy petition preparer who assisted the Debtors in preparing the
Debtors’ statements and schedules in this bankruptcy case. 	The United States Trustee asserts
that Ms. Adams violated 11 U.S.C. § 110 by 1) providing legal advice to the Debtors concerning
their bankruptcy proceeding; 2) failing to provide the Debtors with written notice that she was
not an attorney contrary to 11 U.S.C. § 110(b)(2) 1
; 3) receiving the court filing fee from the
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Debtors; and 4) charging an unreasonable and excessive fee for her services. 	The United States
Trustee asserts further that providing legal advice constitutes an unfair, deceptive or fraudulent
act within the meaning of 11 U.S.C. § 110(1)(l). 	The United States Trustee requests that the
Court fine Ms. Adams $500.00 for each violation of 11 U.S.C. § 110, impose sanctions in the
amount of $2,000.00 based on Ms. Adams’ alleged fraudulent, unfair and deceptive practices,
and order Ms. Adams to disgorge all but $100.00 of the fee the Debtors paid her in connection
with this case.
The Court held a final hearing on the Motion for Sanctions on October 16, 2008 and took
the matter under advisement. 	Upon consideration of the evidence and testimony admitted at the
final hearing, the Court finds that Ms. Adams violated 11 U.S.C. § 110. Consequently, the Court
will impose sanctions and assess fines against Ms. Adams as determined below.
FINDINGS OF FACT
Based on the evidence presented at the final hearing, the Court enters the following
findings of fact:
1. 	Tammy Adams is a bankruptcy petition preparer doing business as Winds of Change
Document Preparation Service. 	She is not an attorney licensed to practice law in the state of
New Mexico, nor is she a paralegal or legal assistant working under the supervision and control
of a licensed attorney.
2. Debtors filed a voluntary petition under Chapter 7 of the Bankruptcy Code on
December 19, 2007 as Case No. 7-07-13207 MR.
3. 	Ms. Adams prepared the documents filed by the Debtors in this case, including the
Petition for Relief, Schedules A through J, the Statement of Financial Affairs, the Statement of
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Current Monthly Income and Means Test Calculation (“Form B22A”), and the Disclosure of
Compensation of Bankruptcy Petition Preparer.
4. 	Ms. Adams filed a Notice to Debtor by Non-Attorney Bankruptcy Petition Preparer.
See Exhibit J.
5. 	Debtors paid Ms. Adams $642.00 for her services in connection with this case.
6. Neither of the Debtors speak or read English very well. 	Mr. Rojero testified at the
final hearing that he can speak and read a little bit of English, but not very well. 	A translator
was used at the final hearing.
7. Ms. Adams met with the Debtors at her home so that she could prepare the paperwork
necessary to file the bankruptcy. 	The Debtors had a friend who served as a translator when they
met with Ms. Adams. 	Debtors provided Ms. Adams with information including bills and credit
reports from which she prepared their petition, statements, and schedules.
8. Ms. Adams provided the Debtors with the exemption statutes and other pre-printed
materials regarding bankruptcy, along with a Case Information Worksheet. See Exhibits B, C,
D, E, F, G, H, I, and L. The handwriting on the Case Information Worksheet is Ms. Adams’.
See Exhibit D.
9. Mr. Rojero testified that he did not know that Ms. Adams was not an attorney until the
meeting of creditors, that Ms. Adams told him he would not have to pay creditors but could keep
his home, and that he should file bankruptcy under Chapter 7. 	In determining values for
property listed in the Debtors’ statements and schedules, Ms. Adams asked Mr. Rojero what he
paid for personal property and what he thought he could receive if he sold them at a garage sale
and told him he should use garage sale values.
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10. The Debtors do not understand the exemption statutes identified on Schedule C filed
in their bankruptcy case and did not check the box indicating their election of exemptions under
11 U.S.C. § 522(b)(3) as indicated on Schedule C.
11. The Debtors obtained a money order to pay the filing fee. 	They paid Ms. Adams’
fee in cash. Mr. Rojero could not recall whether Ms. Adams sent in the bankruptcy paperwork
with the filing fee or he sent it to the Court for filing.
12. 	Ms. Adams used bankruptcy software to complete the statements and schedules
based on information the Debtors provided her. 	The bankruptcy software is pre-set to use the
New Mexico exemption statutes. Ms. Adams uses the New Mexico exemptions to complete
Schedule C unless the client requests federal exemptions.
13. Following the meeting of creditors Debtors completed a Questionnaire for Debtors
Without an Attorney (“Questionnaire”). See Exhibit A. 	The Questionnaire reports that the
Debtors paid Ms. Adams $642.00, which included the court filing fees, that the person who
assisted the Debtors explained the difference between Chapter 7 and Chapter 13 and explained
what an exemption was. 	The Questionnaire also reflects that the petition preparer did not say or
indicate to the Debtors that she was an attorney or working with an attorney.
14. 	Debtors fall below the median income for a family of the same size in this district.
15. Dalene Lucero, a paralegal who works on bankruptcy matters for an attorney in
Roswell, New Mexico, testified that it typically takes about 1.5 to 2 hours to prepare the
paperwork to file a bankruptcy for an under-median income debtor. She further testified that
typing services in the area typically charge about $5.00 per page to type information onto blank
forms.
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2Section 110(e)(2)(B) provides, in relevant part:
[L]egal advice . . . includes advising the debtor–
(I) whether–
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CONCLUSIONS OF LAW
1. Under 11 U.S.C. § 110, persons who negligently or fraudulently prepare bankruptcy
petitions on behalf of debtors or fail to comply with the requirements under that section are
subject to the imposition of penalties. See, e.g., 11 U.S.C. § 110(I) and (l).
2. 	A bankruptcy petition preparer is defined as “a person, other than an attorney for the
debtor or an employee of such attorney under the direct supervision of such attorney, who
prepares for compensation a document for filing[.]” 11 U.S.C. § 110(a)(1).
3. A “document for filing” is further defined under 11 U.S.C. § 110(a)(2) as “a petition
or any other document prepared for filing by a debtor in a United States bankruptcy court or a
United States district court in connection with a case under this title.” 11 U.S.C. § 110(a)(2).
4. Ms. Adams is a bankruptcy petition preparer within the meaning of 11 U.S.C. §
110(a)(1).
5. Bankruptcy petition preparers are prohibited from offering legal advice. 11 U.S.C. §
110(e)(2)(“A bankruptcy petition preparer may not offer a potential bankruptcy debtor any legal
advice . . .”).
6. Legal advice includes advising the debtor 1) whether to commence a case under the
Bankruptcy Code; 2) whether filing under Chapter 7 or 13 is appropriate; 3) whether the debtor
will be allowed to retain his or her home after filing for bankruptcy; 4) how to characterize the
debtor’s property interests or debts; and 5) about bankruptcy procedures and rights. 	11 U.S.C. §
110(e)(2)(B)(I), (iii), (vi) and (vii). 2
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(I) to file a petition under this title; or
(II) commencing a case under chapter 7, 11, 12, or 13 is
appropriate;
(ii) whether the debtor’s debts will be discharged in a case under
this title;
(iii) whether the debtor will be able to retain the debtor’s home,
car, or other property after commencing a case under this
title;
(iv) concerning--
(I) the tax consequences of a case brought under this title; or
(II) the dischargeability of tax claims;
(v) whether the debtor may or should promise to repay the debts to a creditor or
enter into a reaffirmation agreement with a creditor to reaffirm a debt;
(vi) concerning how to characterize the nature of the debtor’s interests in property
or the debtor’s debts; or
(vii) concerning bankruptcy procedures and rights.
11 U.S.C. § 110(e)(2).
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7. Bankruptcy petition preparers are prohibited from collecting payment from a debtor
for court fees, such as the filing fee for filing a petition with the Bankruptcy Court. 11 U.S.C. §
110(g).
8. Ms. Adams signed the Debtors’ bankruptcy petition as a “Non-Attorney Petition
Preparer.” By signing as a “Non-Attorney Petition Preparer” Ms. Adams acknowledged under
oath that she is subject to the provisions of 11 U.S.C. § 110, governing non-attorney bankruptcy
petition preparers.
9. 	Pursuant to 11 U.S.C. § 110(I), upon a finding that a bankruptcy petition preparer has
violated the provisions under that section, or has committed any fraudulent, unfair, or deceptive
act, the Court must order the bankruptcy petition preparer to pay the debtors a sanction. 	That
section provides:
If a bankruptcy petition preparer violates this section or commits any act that the
court finds to be fraudulent, unfair, or deceptive, on a motion of the debtor,
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trustee, United States trustee (or the bankruptcy administrator, if any), and after
notice and a hearing, the court shall order the bankruptcy petition preparer to pay
the debtor --
(A) the debtor’s actual damages;
(B) the greater of --
(I) $2,000; or
(ii) twice the amount paid by the debtor to the bankruptcy petition
preparer for the preparer’s services; and
(C) reasonable attorneys’ fees and costs in moving for damages under this
subsection.
11 U.S.C. § 110(b).
10. A bankruptcy petition preparer’s failure to comply with 11 U.S.C. § 110(e) by
improperly offering the debtor legal advice may result in forfeiture of all fees charged by the
bankruptcy petition preparer in connection with the case. 11 U.S.C. § 110(h)(3)(B) (“All fees
charged by a bankruptcy petition preparer may be forfeited in any case in which the bankruptcy
petition preparer fails to comply with this subsection or subsection (b), (c), (d), (e), (f), or (g).”).
11. Any fee charged by a bankruptcy petition preparer which the Court finds exceeds the
value of services provided must be turned over to the bankruptcy trustee. 11 U.S.C. §
110(h)(3)(A). The Debtors may exempt the funds recovered by the trustee in accordance with 11
U.S.C. § 522(b). 11 U.S.C. § 110(h)(C).
12. 	The Court may also fine a bankruptcy petition preparer $500.00 for each violation or
failure to comply with subsections (b)-(h) of 11 U.S.C. § 110. 11 U.S.C. § 110(l)(1) (“A
bankruptcy petition preparer who fails to comply with any provision of subsection (b), (c), (d),
(e), (f), (g), or (h) may be fined not more than $500 for each such failure.”).
13. Providing a debtor with legal advice, which constitutes the unauthorized practice of
law, can also constitute an unfair or deceptive act within the meaning of 11 U.S.C. § 110(I). In re
Moffett, 263 B.R. 805, 813 (Bankr.W.D.Ky. 2001)(“[T]he unauthorized practice of law by a
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bankruptcy petition preparer may constitute a fraudulent, unfair or deceptive act within the
context of 11 U.S.C. § 110(i)(1).”)(citations omitted); In re Gomez, 259 B.R. 379, 386
(Bankr.D.Colo. 2001)(“For a petition preparer to offer legal expertise or to provide legal
information, analysis or advice is patently unfair and deceptive to debtors.”); In re Guttierez 248
B.R. 287, 294 (Bankr.W.D.Tex. 2000)(finding that bankruptcy petition preparer “engaged in
fraudulent and deceptive conduct when she both offered and provided legal services without a
law license.”).
14. Ms. Adams gave the Debtors legal advice by 1) determining under which chapter of
the Bankruptcy Code to file; 2) choosing the New Mexico exemptions and applying them to the
Debtors’ assets; 3) telling the Debtors that they would be able to keep their home after the
bankruptcy; and 4) advising the Debtors how to value their property in their statements and
schedules. These actions violated 11 U.S.C. § 110(e)(2)(B)(i), (iii) and (vi). 	As stated by the
Gomez court, “[a] petition preparer may not assist a debtor in determining what information
should be included on such documents or offer any information or advice as to what the law is or
how it applies to the debtor’s circumstances.” Gomez, 259 B.R. at 386. 	“[A] petition preparer is
limited by §110 to copying and typing bankruptcy documents.” Id.
15. Ms. Adams gave the Debtors information concerning bankruptcy, including a list of
federal and state exemptions, and information the Bankruptcy Court provides to pro se debtors,
but it is clear, based on Mr. Rojero’s testimony, that the Debtors did not understand the types of
exemptions available to them or what property they could claim exempt. 	Ms. Adams made
those elections, even if her bankruptcy software program automatically uses the New Mexico
exemption statutes. 	Such actions constitute an unauthorized practice of law and violates 11
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U.S.C. § 110(e)(2)(B). See In re Moffett, 263 B.R. 805, 814 (Bankr.W.D.Ky. 2001)(“[A]dvising
clients about exemptions, or determining which exemptions apply to a client’s property, is the
unauthorized practice of law.”)(citing In re Gomez, 259 B.R. at 387 and In re Lyvers, 179 B.R.
837, 839-840 (Bankr.W.D.Ky. 1995)); In re Kaitangian, 218 B.R. 102, 110 (Bankr.S.D.Cal.
1998)(finding that bankruptcy petition preparer violated § 110 by choosing exemptions, stating
that “[p]lugging in solicited information from questionnaires and personal interviews to a pre-
packaged bankruptcy software program constitutes the unauthorized practice of law.”).
16. Mr. Rojero testified that he did not recall whether he or Ms. Adams mailed the
petition, statements and schedules to the Bankruptcy Court for filing, but he clearly remembered
that he paid Ms. Adams in cash and obtained a money order for the filing fee. Based on such
testimony, the Court concludes that there is insufficient evidence that Ms. Adams improperly
collected the filing fee in violation of 11 U.S.C. § 110(g).
17. Because a bankruptcy petition preparer is restricted to performing “only the modest
service of transcribing or typing bankruptcy forms that the debtors alone must prepare without
assistance,” a reasonable fee for such services should be similar to those that a professional typist
or word processor would charge. 	In re Bush, 275 B.R. 69, 84 (Bankr.D.Idaho 2002). 	Fees
charged by a bankruptcy petition preparer in excess of the reasonable value for such services are
subject to turnover in accordance with 11 U.S.C. § 110(h)(3). 	Ms. Adams charged the Debtors
$642.00 to prepare their petition, statements, and schedules. 	Together, the petition, statements,
and schedules filed in the Debtor’s bankruptcy proceeding totaled thirty-four (34) pages. See
Case No. 7-07-13204 MR, Docket #1. 	Ms. Lucero testified that typists typically charge $5.00
per page to type information onto blank forms.
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3Section 110(i)(1)(B) directs the court to order payment of “the greater of . . . $2,000; or .
. twice the amount paid by the debtor to the bankruptcy petition preparer for the preparer’s
services[.]” 11 U.S.C. § 110(i)(1)(B). In this case, the Debtors paid Ms. Adams $642.00 for her
services, so Ms. Adams is subject to the greater amount of $2,000.00 under this section.
4See, e.g., Moffett, 263 B.R. at 815 (concluding that “[b]ecause [the bankruptcy petition
preparer] has engaged in the unauthorized practice of law . . . she has also committed fraudulent,
unfair or deceptive acts in violation of 11 U.S.C. § 110(i)(1).”).
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18. The fee charged by Ms. Adams in this bankruptcy case was excessive, and all but
$170.00 of the fee will be disallowed in accordance with 11 U.S.C. § 110(h)(3)(A). 	Because the
Debtors have sufficient New Mexico exemption amounts in excess of those claimed on Schedule
C, the disallowed portion of the fee shall be paid over to the Debtors in accordance with 11
U.S.C. § 110(h)(C). 	See 11 U.S.C. § 110(h)(C) (“An individual may exempt any funds
recovered under this paragraph under section 522(b).”); Debtor’s Schedule C; N.M.S.A. 1978 §
42-10-1 and § 42-10-2 (Cum. Supp. 2007).
19. 	By giving legal advice to the Debtors in violation of 11 U.S.C. § 110(e)(2)(B), Ms.
Adams committed an act that was fraudulent, unfair, or deceptive, and is, therefore, subject to a
sanction of $2,000.00 3 payable to the Debtors in accordance with 11 U.S.C. § 110(i)(1)(B)(i).4
20. As noted by the Moffett court, “[s]ome courts have held that the use of any
questionnaire to solicit information from the client which is then used to complete the official
forms through use of a computer program is the unauthorized practice of law.” Moffett, 263 B.R.
at 815 (citing Hastings v. United States Trustee (In re Agyekum), 225 B.R. 695, 702 (9th Cir.
1998) and In re Moore, 232 B.R. 1, 8 (Bankr. D.Me. 1999)(holding “that a bankruptcy petition
preparer’s unlawful dispensation of legal advice constitutes a ‘fraudulent, unfair, or deceptive
act’ within the meaning of § 110(i)(1).”)(citation omitted)). 	Such action constitutes an
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unauthorized practice of law because “transferring information from the questionnaire to the
official bankruptcy forms invariably will require some legal judgment.” Moffett, 263 B.R. at 815.
21. Ms. Adams used a questionnaire, which has her writing on it, to solicit information
from the Debtors from which she prepared the petition, statements and schedules using a
bankruptcy computer software program. 	Such actions are unfair, deceptive, or fraudulent
inasmuch as they required Ms. Adams to render legal assistance to the Debtors that she is
prohibited from providing as a non-attorney bankruptcy petition preparer.
22. 	Upon a finding of a fraudulent, unfair, or deceptive act, the sanction imposed under
11 U.S.C. § 110(i)(1) is mandatory. See 11 U.S.C. § 110(i)(1) (“ . . . the court shall order the
bankruptcy petition preparer to pay the debtor”)(emphasis added); In re Jarvis, 351 B.R. 894,
898 (Bankr.E.D.Tenn. 2006)(stating that “[t]his section [110(i)(1)] requires the imposition of
sanctions by the court for a violation of §110 if the violation is brought to the court’s attention
on motion fo the United States Trustee” and noting further that “[t]he language of this section is
mandatory.”); In re McGill, 2007 WL 1119939 *7 (Bankr.E.D.Tenn. 2007)(unreported)(stating
that “[t]he language of this section is mandatory and cumulative.”).
23. The instances of giving legal advice to the Debtors set forth in conclusion number
14., supra, subject Ms. Adams to a fine of not more than $500.00 for each violation. 11 U.S.C. §
110(l)(1). 	The Court has discretion to determine the amount of the fine per violation, provided
that it does not exceed $500. See 11 U.S.C. § 110(l)(1) (“A bankruptcy petition preparer . . . may
be fined not more than $500 for each such failure.”)(emphasis added). See also In re Springs,
358 B.R. 236, 247 (Bankr.M.D.N.C. 2006)(imposing fine of $35.00 for each violation). The
Court concludes that a fine in the amount of $25.00 for each instance is appropriate.
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These findings of fact and conclusions of law are entered in accordance with Rule 7052,
Fed.R.Bankr.P. 	The Court will enter an order consistent with these findings and conclusions.
__________________________________
MARK B. McFEELEY
United States Bankruptcy Judge
Date entered on docket: December 10, 2008
COPY TO:
Alice Nystel Page
Office of the United States Trustee
PO Box 608
Albuquerque, NM 87103
Tammy Adams
Winds of Change Document Preparation Service
3102 S. Union Ave.
Roswell, NM 88203
Jose L. Rojero
Martina Rojero
617 S. McKinley
Hobbs, NM 88240
Linda S. Bloom
Chapter 7 Trustee
PO Box 218
Albuquerque, NM 87103
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