United States Trustee v. Brown

UNITED STATES BANKRUPTCY COURT
DISTRICT OF NEW MEXICO
In re:
TERRENCE D. MARTIN and
LYNNE M. MARTIN,
Debtors. 	No. 7-09-10956 JA
UNITED STATES TRUSTEE,
Plaintiff,
v. 	Adv. No. 09-1075 S
PAMELA BROWN,
SOUTHWEST BANKRUPTCY SERVICES,
Defendant.
______________________________
In re:
TIMOTHY FELIX TREE and
DONNA KATHERINE LEE-TREE,
Debtors. 	No. 7-09-11188 SA
UNITED STATES TRUSTEE,
Plaintiff,
v. 	Adv. No. 09-1076 S
PAMELA BROWN,
SOUTHWEST BANKRUPTCY SERVICES,
Defendant.
______________________________
In re:
THOMAS A. TRUJILLO and
GERALDINE M. TRUJILLO,
Debtors. 	No. 7-09-10920 SS
UNITED STATES TRUSTEE,
Plaintiff,
v. 	Adv. No. 09-1077 S
PAMELA BROWN,
SOUTHWEST BANKRUPTCY SERVICES,
Defendant.
______________________________
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In re:
DAN R. McBRIDE,
Debtor. 	No. 7-09-10902 MS
UNITED STATES TRUSTEE,
Plaintiff,
v. 	Adv. No. 09-1078 S
PAMELA BROWN,
SOUTHWEST BANKRUPTCY SERVICES,
Defendant.
______________________________
In re:
JESSICA LYNN ROBERTSON,
Debtor. 	No. 7-09-10983 MA
UNITED STATES TRUSTEE,
Plaintiff,
v. 	Adv. No. 09-1079 S
PAMELA BROWN,
SOUTHWEST BANKRUPTCY SERVICES,
Defendant.
______________________________
In re:
KEVIN LOWE ROBERTS,
Debtor. 	No. 7-09-11094 MA
UNITED STATES TRUSTEE,
Plaintiff,
v. 	Adv. No. 09-1080 S
PAMELA BROWN,
SOUTHWEST BANKRUPTCY SERVICES,
Defendant.
______________________________
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In re:
SCOTT E. CASTILLO,
Debtor. 	No. 7-09-11410 MA
UNITED STATES TRUSTEE,
Plaintiff,
v. 	Adv. No. 09-1081 S
PAMELA BROWN,
SOUTHWEST BANKRUPTCY SERVICES,
Defendant.
______________________________
In re:
SHARON C LOVATO,
Debtor. 	No. 13-09-12786 JS
UNITED STATES TRUSTEE,
Plaintiff,
v. 	Adv. No. 09-1100 S
PAMELA BROWN,
SOUTHWEST BANKRUPTCY SERVICES,
Defendant.
______________________________
In re:
WILLIE CRUZ PADILLA and
RITA LEE PADILLA,
Debtors. 	No. 7-09-11797 SA
UNITED STATES TRUSTEE,
Plaintiff,
v. 	Adv. No. 09-1101 S
PAMELA BROWN,
SOUTHWEST BANKRUPTCY SERVICES,
Defendant.
______________________________
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1Ten adversary cases were consolidated into the Adversary
09-1075. 	All seek substantially the same relief from Brown, who
is the bankruptcy petition preparer (“BPP”) that prepared the ten
bankruptcy cases. 	After the entry of these Findings of Fact and
Conclusions of Law, the ten adversaries will be unconsolidated
and individual judgments will be entered in the ten adversary
cases.
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In re:
ROBERT ERNEST JORDAN and
BILLIE JO JORDAN,
Debtors. 	No. 13-09-12081 SA
UNITED STATES TRUSTEE,
Plaintiff,
v. 	Adv. No. 09-1102 S
PAMELA BROWN,
SOUTHWEST BANKRUPTCY SERVICES,
Defendant.
______________________________
UNITED STATES TRUSTEE, 	ALL ABOVE
Plaintiff, 	ADVERSARIES
CONSOLIDATED INTO
v. 	Adv. No. 09-1075 S
PAMELA BROWN,
SOUTHWEST BANKRUPTCY SERVICES,
Defendant.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
AFTER TRIAL ON THE MERITS
This matter came before the Court on November 10, 2009, for
trial on the merits of Plaintiff United States Trustee’s (“UST”)
complaint 1 against Defendant Pamela Brown (“Brown”). 	The UST
appeared through its attorney Leonard Martinez-Metzgar. 	Brown
did not appear at the trial, although she appeared at several
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2The statute, § 110(k), prohibits the unauthorized practice
of law, but does not contain a specific sanction provision as do
other parts of § 110.
3The United States Trustee has standing to bring
disgorgement and damages motions against a bankruptcy petition
preparer who violates § 110. 	11 U.S.C. §§ 110(l)(3). 	The United
States Trustee in the district in which a bankruptcy petition
preparer resides, has conducted business, or the United States
Trustee in any district in which the debtor resides, has standing
to bring an injunction action against a bankruptcy petition
preparer for violations of § 110. 	11 U.S.C. § 110(j)(1).
Page -5-
pretrial conferences and participated partially in other pretrial
matters.
In this adversary proceeding the UST seeks a declaration
that Brown has been practicing law without a license 2 and has
violated numerous sections of 11 U.S.C. § 110. 	It seeks a
permanent injunction against Brown, fines and disgorgement of
fees paid to her 3 .
The UST presented testimony from thirteen witnesses,
introduced two depositions into evidence, and presented twenty-
eight exhibits, all of which were admitted into evidence. 	The
Court also took judicial notice of earlier proceedings in this
adversary, particularly the motion for an injunction and the
award of preliminary injunctive relief, and judicial notice of
the ten related main bankruptcy files. 	Based on the evidence
presented and the arguments of the UST, the Court finds that a
judgment for monetary relief and permanent injunctive relief
should be entered for the UST.
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The Court has subject matter jurisdiction of this matter
pursuant to 28 U.S.C. § 1334 and Administrative Order Misc. No.
84-0324 (D. N.M. March 19, 1992). 	The Court has personal
jurisdiction over the parties. 	This is a core proceeding under
28 U.S.C. § 157(b)(2)(A).
FINDINGS OF FACT
1. 	Brown is no stranger to the United States Bankruptcy Court
for the District of New Mexico. 	On June 2, 2009, the Honorable
Mark B. McFeeley entered Findings of Fact and Conclusions of Law
in In re Salazar, No. 7-08-12538-MA (Bankr. D. N.M. 2009)(2009
Westlaw 2922799). 	Judge McFeeley ruled that Brown was a BPP, and
that she had given legal advice by determining under what chapter
of the Bankruptcy Code to file, advising what debts would be
discharged, determining the classification of the debts, and
determining whether to take New Mexico exemptions and then
applying them to the debtor’s assets. 	He found that a $200
charge by Brown was excessive and disallowed all but $100 of her
fees. 	And, he fined Brown $200 for her violation of Section 110
of the Bankruptcy Code.
2. 	The UST commenced these adversary proceedings on June 3,
2009.
3. 	On October 1, 2009, this Court entered a Preliminary
Injunction against Brown which ordered:
IT IS THEREFORE ORDERED that Defendant Pamela Brown is
hereby enjoined from acting as a bankruptcy petition
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preparer effective immediately, including but not
limited to, the following:
A. Defendant Brown shall not provide any assistance to
anyone in connection with any bankruptcy matter in any
capacity including but not limited to as a sole
proprietor, partner, officer, employee, or in
association with any relative or legal entity
controlled by a relative.
B. Defendant Brown shall not help anyone fill out
bankruptcy forms, give legal advice; and/or submit
documents to the bankruptcy court on anyone’s behalf;
C. With regard to petitions not yet completed and/or
not yet provided to customers/potential debtors,
Defendant Brown shall:
1. Call each customer/prospective debtor and tell
them that she can no longer provide services for
them and that they should return to Defendant
Brown’s office and pick up original documents
(such as bank statements, check registers, etc.)
previously provided to Defendant Brown;
2. Refund to each customer/ potential debtor any
funds collected by Defendant Brown for her
services and tell them to seek help from another
bankruptcy petition preparer or an attorney;
3. Shred or otherwise destroy any documents in
Defendant Brown’s possession which she has
prepared or is in the process of preparing for
customers/potential debtors.
On November 19, 2009, the Court entered an Order Continuing
Injunction pending the filing of these Findings of Fact and
Conclusions of Law. 	(doc 57).
4. 	Lynn Martin (“Martin”) testified that Brown had prepared
her bankruptcy statements and schedules, Exhibit T-1. 	Brown
informed Martin about the need for credit counseling. 	Martin
does not know the difference between federal and state
exemptions, nor does she know the difference between priority and
unsecured debts. 	Brown selected the exemption statutes to claim
exemptions and separated out priority from unsecured debts on the
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4See 11 U.S.C. § 110(b)(2)(B)(iii)(II).
Page -8-
schedules. 	Martin did not know what a presumption was, and did
not remember checking the box on Form 22A that the presumption
“did not arise”. 	Martin paid Brown $395 for preparation of her
documents. 	The Statement of Financial Affairs (“SFA”) question 9
states that Martin paid nothing for debt counseling or
bankruptcy. 	Page 3 of the Voluntary Petition was not signed by
Brown, did not disclose her social security number, and did not
disclose her address. 	It stated only “pro se.” 	Martin did not
know why Brown put “pro se” on the petition. 	Martin also
disclosed to Brown that she had a car accident claim, but Brown
told her that she did not need to list it as an asset. 	Brown
failed to attach Official Form 19 (“Form 19"), which is a
mandatory attachment whenever a BPP prepares a document for
filing 4
. 	At the first meeting of creditors, Martin filled out
the Questionnaire for Debtors Without an Attorney, which is a UST
prepared questionnaire supplied by Trustees to self-represented
debtors. 	In it, Martin stated that Brown had explained the
difference between Chapters 7 and 13 and explained what an
exemption was. 	At the first meeting of creditors, the Martins
told the Trustee about the accident claim, which the Trustee is
now administering. 	The case trustee is Philip Montoya.
5. 	Jessica Ramirez (“Ramirez”) testified that Lynn Martin is
her daughter and that the latter recommended Brown as a petition
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Page -9-
preparer. 	Ramirez paid Brown $395, but ended up not filing
bankruptcy. 	Twice she asked for a refund and a return of her
documents and twice was told that Brown was not allowed to give
back anything.
6. 	Philip J. Montoya (“Montoya”) was the trustee appointed in
the Martin case. 	He testified that he questioned the Debtors
about having any causes of action and they admitted to having the
auto accident claim, and in addition, a claim against a
chiropractor for further injuries. 	The Martin case is now an
asset case. 	Montoya testified that he has had prior experience
with Brown not listing assets. 	In In re Larry Lee Davis, No.
08-13208-s7 (Bankr. D. N.M. 2008), Brown did not list the
seller’s interest in a real estate contract as an asset of the
Debtor. 	That interest is now listed on the Trustee’s interim
reports at $52,762.
7. 	Michael Caplan (“Caplan”) was the Chapter 7 trustee in
several of these cases. 	He testified generally that he
encounters problems in cases prepared by Brown. 	Specifically, he
was troubled by Brown’s habit of not signing the petition or
disclosing her social security number or address, and of not
disclosing payments to her in a disclosure statement or in the
statement of financial affairs. 	By having the debtors sign the
documents, he believed Brown was causing debtors to commit
perjury.
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8. 	Robert Jordan (“Jordan”) testified that Brown had prepared
his bankruptcy statements and schedules, Exhibit T-25. 	Brown
informed Jordan about the need for credit counseling. 	Jordan
does not know the difference between federal and state
exemptions, nor does he know the difference between priority and
unsecured debts. 	Brown selected the exemption statutes to claim
exemptions and separated out priority from unsecured debts on the
schedules. 	Jordan did not know what a presumption was, and did
not remember checking the box on Form 22A that the presumption
“did not arise”. 	Martin paid Brown $400 for preparation of his
documents. 	SFA question 9 states that Jordan paid nothing for
debt counseling or bankruptcy. 	Page 3 of the Voluntary Petition
was not signed by Brown, did not disclose her social security
number, and did not disclose her address. 	Brown failed to attach
Form 19. 	The (chapter 13) case trustee is now Kelley Skehen.
9. 	P. Diane Webb (“Webb”), an Albuquerque bankruptcy attorney,
ended up representing Jordan in his bankruptcy case. 	She
testified about problems with the original filing, which she
described as “a mess.” 	She had to amend schedules A, B, C, D, E,
F, I, J, the SFA and the B22C. 	In addition, she learned that
Jordan had filed bankruptcy to save his house, thinking that he
was obtaining the relief afforded by a Chapter 13. 	Jordan had
been negotiating with Bank of America to modify the mortgage
loan, but when he filed bankruptcy the modification fell through.
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Webb caused the case to be converted to Chapter 13 to save the
house.
10. 	Sharon Lovato (“Lovato”) testified that Brown had prepared
her bankruptcy statements and schedules, Exhibit T-19. 	Brown
informed Lovato about the need for credit counseling. 	Lovato
does not know the difference between federal and state
exemptions, nor does she know the difference between priority and
unsecured debts. 	Brown selected the exemption statutes to claim
exemptions and separated out priority from unsecured debts on the
schedules. 	Lovato did not know what a presumption was, and did
not remember checking the box on Form 22A that the presumption
“did not arise”. 	Lovato paid Brown $395 for preparation of her
documents. 	SFA question 9 states that Lovato paid nothing for
debt counseling or bankruptcy. 	Page 3 of the Voluntary Petition
was not signed by Brown, did not disclose her social security
number, and did not disclose her address. 	It stated only “Pro
Se.” 	Brown failed to attach Form 19. 	Lovato told Brown that she
had filed a previous bankruptcy in 2004. 	Brown told her that
there was only a five-year waiting period between bankruptcies.
The UST filed a motion to dismiss Lovato’s case for discharge
ineligibility under § 727(a)(8). 	In response, Lovato hired an
attorney and she is now in Chapter 13. 	The case trustee is now
Kelley Skehen.
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11. 	Gerald Velarde, an Albuquerque bankruptcy attorney, ended up
representing Lovato in her Chapter 13 case. 	He testified in
addition to converting the case to Chapter 13, he had to amend
Schedule B and file amended exemptions to make use of the federal
“wildcard” exemption.
12. 	Jessica Robertson (“Robertson”) testified that Brown had
prepared her bankruptcy statements and schedules, Exhibit T-13.
Brown informed Robertson about the need for credit counseling.
Robertson does not know the difference between federal and state
exemptions, nor does she know the difference between priority and
unsecured debts. 	Brown selected the exemption statutes to claim
exemptions and separated out priority from unsecured debts on the
schedules. 	Robertson did not know what a presumption was, and
did not remember checking the box on Form 22A that the
presumption “did not arise”. 	She also does not know what an
executory contract or unexpired lease is. 	Robertson paid Brown
$395 for preparation of her documents. 	SFA question 9 states
that Robertson paid nothing for debt counseling or bankruptcy.
Page 3 of the Voluntary Petition was not signed by Brown, did not
disclose her social security number, and did not disclose her
address. 	It stated only “Pro Se.” 	Brown failed to attach Form
19. 	The case trustee is Yvette Gonzales.
13. 	Scott Castillo (“Castillo”) testified that Brown had
prepared his bankruptcy statements and schedules, Exhibit T-7.
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Brown chose to use the federal exemptions by checking the box on
Schedule C. 	Castillo paid Brown $395 for preparation of his
documents. 	SFA question 9 states that Jordan paid nothing for
debt counseling or bankruptcy. 	Page 3 of the Voluntary Petition
was not signed by Brown, did not disclose her social security
number, and did not disclose her address. 	It states only “Pro
Se.” 	Brown failed to attach Form 19. 	The case trustee is Linda
Bloom.
14. 	Kevin Roberts (“Roberts”) testified that Brown had prepared
his bankruptcy statements and schedules, Exhibit T-3. 	Brown
informed Roberts about the need for credit counseling. 	Roberts
does not know the difference between federal and state
exemptions, nor does he know the difference between priority and
unsecured debts. 	Brown selected the exemption statutes to claim
exemptions and separated out priority from unsecured debts on the
schedules. 	Jordan did not know what a presumption was, and did
not remember checking the box on Form 22A that the presumption
“did not arise”. 	Martin paid Brown $295 for preparation of his
documents. 	SFA question 9 states that Jordan paid nothing for
debt counseling or bankruptcy. 	Page 3 of the Voluntary Petition
was not signed by Brown, did not disclose her social security
number, and did not disclose her address. 	Roberts’ petition was
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5Brown used the 10/05 version of Form 19. 	Form 19 was
revised in 12/07 and now requires the name, address, social
security number and signature of the BPP. 	See Official Form 19.
Page -14-
accompanied by an outdated 5 Form 19, which failed to disclose
necessary information. 	At the first meeting of creditors the
Trustee, through questioning, discovered an unlisted creditor and
asked Roberts to amend to add the creditor. 	Brown prepared an
amendment to Schedule F adding the creditor, for which she
charged $50. 	Nowhere on the amendment did Brown disclose that
the amendment was prepared by a petition preparer, and it did not
disclose her name, social security number or address. 	Brown
failed to attach Form 19 to the amendment. 	The case trustee is
Michael Caplan.
15. 	Donna Lee-Tree (“Lee-Tree”) testified that Brown had
prepared her bankruptcy statements and schedules, Exhibit T-9.
Lee-Tree does not know the difference between federal and state
exemptions, nor does she know the difference between priority and
unsecured debts. 	Brown selected the exemption statutes to claim
exemptions and separated out priority from unsecured debts on the
schedules. 	Brown elected to list the student loan debt on
Schedule E. 	Lee-Tree did not know what a presumption was, but
remembers being instructed to check the box on Form 22A that the
presumption “did not arise”. 	Lee-Tree paid Brown $395 for
preparation of her documents. 	SFA question 9 states that Lee-
Tree paid nothing for debt counseling or bankruptcy. 	Page 3 of
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the Voluntary Petition was not signed by Brown, did not disclose
her social security number, and did not disclose her address. 	It
stated only “Pro Se.” 	Brown failed to attach Form 19. 	Exhibit
T-11 is a sample of the printed questionnaire Brown gave to
Debtors to fill out that enabled her to prepare the bankruptcy
papers. 	It is substantially identical to the forms used by
attorneys to collect information for preparing bankruptcies. 	The
case trustee is Michael Caplan.
16. 	Michael Daniels (“Daniels”), an Albuquerque bankruptcy
attorney, testified that after the first meeting of creditors in
the In re Willie Cruz Padilla and Rita Lee Padilla, No.
09-11797-s7 (Bankr. D. N.M. 2009), he met with the Padillas upon
recommendation of the Trustee. 	Brown had filed the Padillas’
original papers. 	Exhibits T-15, 16. 	Daniels amended Schedule B
to list omitted bank accounts and a preference claim against
Target for $6,742 and Schedule C to exempt the assets. 	He also
amended the SFA to disclose the Target garnishment and item 9 to
indicate that the Padillas had paid $300 to Brown. 	The original
SFA question 9 states that the Padillas paid nothing for debt
counseling or bankruptcy. 	Page 3 of the Voluntary Petition was
not signed by Brown, did not disclose her social security number,
and did not disclose her address. 	It stated only “Pro Se.” 	The
Padilla’s case trustee is Yvette Gonzales.
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17. 	Thomas Trujillo and Geraldine Trujillo (“Trujillos”)
testified by deposition. 	They testified that Brown had prepared
their bankruptcy statements and schedules, Exhibit 3 to
Deposition. 	They do not know the difference between federal and
state exemptions, nor do they know the difference between
priority, secured and unsecured debts. 	Brown listed their home
as owned “JTWROS” without explaining what this was or what it
meant. 	Brown selected the exemption statutes to claim exemptions
and separated out secured from unsecured debts on the schedules.
Brown omitted the home mortgage from Schedules A and D because
the Trujillos stated their intention to pay the debt. 	The
Trujillos did not know what a presumption was, but remember being
instructed to check the box on Form 22A that the presumption “did
not arise”. 	The Trujillos paid Brown $395 for preparation of
their documents. 	SFA question 9 states that the Trujillos paid
nothing for debt counseling or bankruptcy. 	Page 3 of the
Voluntary Petition was not signed by Brown, did not disclose her
social security number, and did not disclose her address. 	It
stated only “Pro Se.” 	Brown failed to attach Form 19. 	At the
first meeting of creditors, the Trujillos filled out the
Questionnaire for Debtors Without an Attorney. 	In it, they
stated that Brown had explained the difference between Chapters 7
and 13 and explained what an exemption was. 	The case trustee is
Yvette Gonzales.
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18. 	The Dan R. McBride (“McBride”) petition appears at Trustee
Exhibit T-17. 	Exhibit T-18 is the Questionnaire for Debtors
without an attorney that Trustee Yvette Gonzales had McBRIDE
complete. 	It discloses that he paid $395 to Brown for preparing
his papers. 	She had explained the difference between chapter 7
and 13, and had explained exemptions. 	Exhibit T-17 SFA question
9 states that the McBride paid nothing for debt counseling or
bankruptcy. 	Page 3 of the Voluntary Petition was not signed by
Brown, did not disclose her social security number, and did not
disclose her address. 	It stated only “Pro Se.” 	Brown failed to
attach Form 19. 	The case trustee is Yvette Gonzales.
19. 	Yvette Gonzales, a Chapter 7 Trustee, testified through a
deposition. 	She is a very experienced trustee, having been on
the Trustee Panel since 1993. 	She was the trustee in five of the
ten cases involved in this consolidated adversary. 	She has grown
to distrust the reliability of documents filed by Brown. 	She
testified that, in general, debtors that have used Brown do not
know why certain exemptions were claimed, don’t know why certain
numbers appear in various places, and don’t know why some
creditors are not scheduled. 	She noticed that after Judge
McFeeley fined Brown for violations of § 110, she stopped signing
any documents she prepared or putting any other identifying
information on them. 	The balance of her testimony agrees with
what the debtors testified to at the trial.
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20. 	No Plaintiff in this combined adversary put on evidence of
actual damages or the payment of attorney’s fees or costs in
moving for damages.
21. 	The Court finds that Brown intentionally concealed her
involvement as a bankruptcy petition preparer in the ten
bankruptcy cases involved in this adversary proceeding.
CONCLUSIONS OF LAW
A. 	Section 110
The conduct of non-attorney bankruptcy petition
preparers is regulated by § 110 of the Bankruptcy Code,
which was initially enacted as part of the Bankruptcy
Reform Act of 1994 and expanded upon by the Bankruptcy
Abuse Prevention and Consumer Protection Act of 2005.
The purpose of the statute was to address the
proliferation of bankruptcy petition preparers not
employed or supervised by attorneys and to enact
limitations on and standards for the types of
activities in which bankruptcy petition preparers could
be engaged, particularly with respect to providing
legal advice and engaging in the unauthorized practice
of law.
In re Evans, 413 B.R. 315, 319-20 (Bankr. E.D. Va. 2009)
(Citations omitted).
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6 Section 110 is part of the Code, and therefore of course
the Court will enforce its provisions, despite the fact that it
is irretrievably flawed.
A few minutes’ thought (much less the time it takes to pass
legislation) makes apparent the contradiction at the heart of the
bankruptcy petition preparer statute. 	In reality a BPP is
permitted by state law to do little more than provide the forms
that are freely available from the Clerk’s office and the
internet, and to serve as a typist to fill out those forms as
dictated by the debtor. 	In short, most thirteen-year-olds can
perform the role of a BPP. 	Yet the statute has spawned an entire
industry of persons effectively posing as “bankruptcy paralegals”
(if not outright attorneys) whose clientele are legions of
debtors who in a real sense have no idea of what they are doing
or with whom they are dealing.
There is no way a BPP can perform the duties effectively
contemplated by the statute without making a variety of legal
decisions for the debtors. 	For example, is the decision about
whether the debtors will file a chapter 7 or a chapter 13
petition determined by the form the BPP provides to the debtors?
How is a decision to reaffirm made? 	(Whether to reaffirm can
have a significant impact on a debtor’s ability to keep the
collateral, 11 U.S.C. §§ 521(a)(2)(B) and (6); 524(c); and
362(h)(1), collateral which debtors often need to continue
earning a living. 	On the other hand, a reaffirmed debt,
particularly one which exceeds the value of the collateral or is
burdensome to the debtor, and cannot be discharged, poses a
serious threat to the utility of the debtor’s discharge.) 	Even
more apparent is the legal impact of the selection of exemptions,
which is inherently an entire series of legal decisions matching
the facts to the law.
The justification for the statute apparently lies in the
proposition that “many cases are routine”. 	See 11 U.S.C. §
527(b) (setting out required disclosures about bankruptcy
assistance from an attorney or BPP). 	No doubt this is true, but
that simplistic analysis essentially conflates, or confuses,
“routine” with “simple”. 	There are hundreds if not thousands of
“routine” heart surgeries performed each day, but no one would
call them “simple”. 	Bottom line, Section 110 is a hoax
carelessly perpetrated on debtors and even on those good faith
BPPs who fail to understand what they are really doing.
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The UST is seeking relief under 11 U.S.C. § 110, which is
set out in full in Appendix A to this opinion. 6 	This lengthy
code section can be broadly summarized as follows:
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7 As of the issuance of this opinion, a little over five
years after this provision of the Bankruptcy Abuse Prevention and
Consumer Protection Act of 2005 (“BAPCPA”) became effective,
there are no such rules or guidelines.
Page -20-
Subsection (a) contains definitions of “bankruptcy petition
preparer” and a “document for filing.” 	Subsections (b) through
(h)(2) mainly spell out specific affirmative and negative duties
the BPP has:
(b)(1): to sign and provide address on documents prepared;
(b)(2): to provide Official Form 19 to the debtor regarding
prohibitions on giving legal advice, which also must be
signed by the debtor and BPP and filed;
(c): to provide a social security number on documents
prepared;
(d): to provide the debtor with a copy of the documents
prepared;
(e)(1): to not execute a document on behalf of a debtor;
(e)(2): to not, in fact, give any legal advice;
(f): to not use the word “legal” in any advertisement;
(g): to not collect any part of the filing fee from the
debtor;
(h)(1): to follow any Supreme Court rules or guidelines on
permissible fees; 7
(h)(2): to disclose, under penalty of perjury, all amounts
received from the debtor.
Subsections (h)(3) through (l) mainly set out penalties for
various violations of the duties established in subsections (b)
through (h)(2). 	Subsections (h)(3) through (h)(5) require a
turnover of moneys to the case trustee:
(h)(3): requires a BPP to turn over to the case trustee any
fee received in violation of (h)(1) or in excess of the
value of the services rendered. 	Also, if the BPP has
violated any of the subsections (b) through (g), the Court
may order forfeiture of all fees charged;
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8 The statute actually refers to subsection (h)(2) rather
than (h)(3). 	This is clearly a typographical error, since, as
noted above, it is subsection (h)(3) that provides for the court
to order a BPP to turn over fees that have been paid, rather than
subsection (h)(2), which requires the BPP to file a disclosure of
fees paid. 	While the Supreme Court has let stand obvious
typographical errors when they more or less made sense as
written, Lamie v. United States Trustee, 540 U.S. 526, 542 (2004)
(dealing with compensation of debtor’s attorney from chapter 7
estate), the court has also stated explicitly that a statute need
not be applied as written if to do so would lead to an absurd
result. 	E.g., id. at 534; United States v. Ron Pair Enterprises,
Inc., 489 U.S. 235, 242 (1989). 	In this instance, to apply the
statute literally as written makes no sense, and the intent of
Congress, always the goal of statutory interpretation and usually
divined from the language itself, Connecticut National Bank v.
Germain, 503 U.S. 249, 253-54 (1992), can easily be gleaned from
the bungled statutory language.
9 Although not relevant to this case, there appears to be an
ambiguity in the statute about whether a creditor can pursue
relief under subsection 110(i)(2). 	Subsection 110(i)(1) seems to
restrict standing to “the debtor, trustee, United States trustee
(or the bankruptcy administrator, if any.)” 	See Hartford
Underwriters Ins. Co. v. Union Planters Bank, N.A., 530 U.S. 1,
6-7 (2000)(“Where a statute ... names the parties granted [the]
right to invoke its provisions, ... such parties only may
act.”)(quoting 2A N. Singer, Sutherland on Statutory Construction
§ 47.23, p. 217 (5th ed.1992)) 	But, subsection 110(i)(2)
provides that “If the trustee or creditor moves for damages on
behalf of the debtor...” (emphasis added). 	Under subsection
110(i)(1) a creditor lacks standing; under 110(i)(2) it seems to
have standing. 	The contradiction may be explained by the fact
that the original language of subsection (i)(1) addressed the
consequence of a dismissal of a case for, among other things, the
failure to file section 521(1) papers (i.e., schedules, statement
(continued...)
Page -21-
(h)(4): describes who can move under subsection (h)(3) 8 for
a turnover of fees to the trustee; and
(h)(5): provides a fine of $500 for each failure to comply
with an (h)(3) court order to turn over funds within 30
days.
Subsection (i) provides for damages to the debtor and statutory
damages to the person 9 (other than the debtor) filing the motion
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9(...continued)
of financial affairs, etc.) due to the BPP’s fault, and provided
for relief for the debtor. 	The statute gave a creditor the right
to seek that relief since the creditor could also be damaged by
the BPP’s failure in that regard. 	Subsection (i)(2), giving a
creditor (and a trustee) the right to damages and attorney fees
and an incentive to seek that relief against the BPP was
consistent with subsection (i)(1) as it then stood. 	BAPCPA
amended subsection (i)(1) to delete the creditor’s right to
pursue relief but did not amend (i)(2), apparently another
example, were one needed (see footnote 8 above), of the shoddy
drafting of BAPCPA.
10 The practice of law in New Mexico without a license is a
crime. 	One must have a license to practice law or face a $500
fine and/or up to 6 months in jail. 	NMSA § 36-2-28. One must
pass the bar examination to get a license. 	SCRA 15-103. 	The
Bankruptcy Code does not define what constitutes the unauthorized
practice of law. 	Cases uniformly refer to state law to determine
what constitutes unauthorized practice of law. 	See, e.g., In re
Bachmann, 113 B.R. 769, 772 (Bankr. S.D. Fla. 1990). 	New Mexico
has not limited the definition of the practice of law to signing
pleadings or appearing in court on another’s behalf. 	Matter of
Chavez, 129 N.M. 35, 42, 1 P.3d 417, 424 (2000). 	Instead, the
Courts have taken a case by case approach and conducted a fact-
specific inquiry to see if, in fact, a party is giving legal
advice to a client whether they are appearing in court for the
client or not. 	Id. 	For example, in State Bar of New Mexico v.
Guardian Abstract and Title Co., Inc., the New Mexico Supreme
Court was faced with deciding whether the defendant title company
had been engaging in the unauthorized practice of law by filling
out attorney-prepared blank forms. 	91 N.M. 434, 575 P.2d 943
(1978).
We hold that filling in blanks in the legal instruments
(continued...)
Page -22-
under subsection (i). 	Subsection (i) penalizes any violation of
Section 110 or any act that the court finds to be fraudulent,
unfair or deceptive. 	Subsection (j) deals with injunctive
relief. 	Subsection (k) reiterates that nothing in section 110
authorizes activities otherwise prohibited by law, including the
unauthorized practice of law. 10 	Subsection (k) has no penalty
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10 (...continued)
here involved, where the forms have been drafted by
attorneys and where filling in the blanks requires only
the use of common knowledge regarding the information
to be inserted, does not constitute the practice of
law. 	But, we further hold that, when the filling in of
the blanks affects substantial legal rights, and if the
reasonable protection of such rights requires legal
skill and knowledge greater than that possessed by the
average citizen, then such practice is restricted to
members of the legal profession. 	(Citations omitted.)
Id. at 440, 575 P.2d at 949. 	Accord In re Anderson, 79 B.R. 482,
484 (Bankr. S.D. Cal. 1987):
Whether one is engaged in the practice of law or is
merely a legal scrivener has long been settled under
California law. In People v. Sipper, 61 Cal.App.2d
Supp. 844, 846 (1943), the court wrote:
The term “practice law” or its equivalent, “the
practice of law,” has been repeatedly defined by
our reviewing courts. They have uniformly said
that “as the term is generally understood, the
practice of law ... includes legal advice and
counsel and the preparation of legal instruments
and contracts by which legal rights are secured
although such matter may or may not be depending
in a court.”
Bankruptcy Code section 110(e)(2)(B) contains a nonexclusive list
of certain types of advice a BPP may not provide: whether to file
bankruptcy, which chapter would be appropriate, whether any
particular debt is dischargeable, whether the debtor can keep
certain assets, tax consequences of bankruptcy, whether the
debtor should reaffirm a debt, concerning how to characterize the
nature of the debtor’s interests in property or debts, and
concerning bankruptcy procedures and rights.
Page -23-
attached, however. 	Subsection (l)(1) sets out a maximum fine of
$500 payable to the UST for each violation of a provision of
subsections (b) through (h). 	Subsection (l)(2) sets out
conditions in which the fines are tripled. 	Subsection (l)(3)
describes who can file a motion under subsection (l). 	Subsection
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Page -24-
(l)(4) requires the UST to deposit fines received into a certain
fund.
B. 	General Conclusions of Law
1. 	Brown is a bankruptcy petition preparer. 	11 U.S.C. §
110(a).
2. 	Brown has continually and intentionally engaged in conduct
prohibited by 11 U.S.C. § 110 and has engaged in the unauthorized
practice of law.
3. 	Brown has continually and intentionally violated 11 U.S.C. §
110(b)(1) by failing to sign and to place her name and address on
documents she prepared for filing.
4. 	Brown has continually and intentionally violated 11 U.S.C. §
110(b)(2) by failing to have debtors sign Form 19, by failing to
sign Form 19, and by failing to file a Form 19 with each document
she prepared for filing.
5. 	Brown has continually and intentionally violated 11 U.S.C. §
110(c) by failing to place her social security number on any
document she prepared for filing.
6. 	Brown has continually and intentionally violated 11 U.S.C. §
110(e)(2) which prohibits providing any legal advice to a
potential bankruptcy debtor. 	The violations include 1)
instructing debtors about the need for credit counseling, 2)
deciding under which chapter to file, 3) deciding whether debtors
should include certain properties or debts on the schedules, 4)
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Page -25-
choosing exemption schemes on behalf of the debtors and then
applying them to the debtors’ properties, 5) determining how to
characterize secured, unsecured and priority debts, 6)
determining whether the presumption of abuse arises, and 7) in
general providing advice regarding bankruptcy procedures and
rights.
7. 	Brown has continually and intentionally violated 11 U.S.C. §
110(h)(2) by failing to disclose any fees received from or on
behalf of debtors within 12 months immediately prior to the
filing of the case and any unpaid fees.
8. 	When a BPP engages in the unauthorized practice of law, the
BPP is committing a “fraudulent, unfair or deceptive act.” 	See
In re Evans, 413 B.R. at 327 (“[C]ourts have uniformly held that
the unauthorized practice of law constitutes a ‘fraudulent,
unfair, or deceptive’ act.”)
C. 	Specific Conclusions of Law
9. 	Regarding Martin’s case, Brown violated § 110(b)(1) by
failing to put her name and address on the petition. 	Brown
violated § 110(b)(2) by failing to file a properly signed Form
19. 	Brown violated § 110(c) by failing to provide her social
security number. 	Brown violated § 110(e)(2) by practicing law by
informing Debtor about the need for credit counseling, explaining
exemptions, applying exemptions to Debtor’s property, classifying
debts as secured or unsecured and priority, informing Debtor that
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11 As provided by § 110(h)(3)(C), Martin (and the other
debtors in their cases) may file a motion to claim this refund as
exempt.
Page -26-
the presumption did not arise, and by advising her to leave
certain assets off the schedules. 	Brown violated § 110(h)(2) by
failing to disclose her fees. 	“All fees charged by a bankruptcy
petition preparer may be forfeited in any case in which the
bankruptcy petition preparer fails to comply with [subsection
(h)] or subsection (b), (c), (d), (e), (f) or (g).” 	11 U.S.C. §
110(h)(3)(B). 	The Court finds that Brown shall forfeit her fees
in this case in the amount of $395, with such fees being payable
to the trustee Philip Montoya. 11 	By attempting to hide her
connection to the case by failing to identify herself or provide
her social security numbers, the Court finds Brown’s actions
deceptive. 	In addition, by practicing law, she has engaged in a
“fraudulent, unfair, or deceptive” act. 	Under § 110(i)(1) the
Court must order Brown to pay to the Debtor the greater of $2,000
or twice the amount paid, i.e., $2,000. 	Finally, “[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.” 	11 U.S.C. § 110(l)(1).
And, the Court must then triple the fine where the BPP “failed to
disclose the identity of the bankruptcy petition preparer.” 	11
U.S.C. § 110(l)(2)(D). 	Brown violated five subsections of the
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12 The Court is aware that $500 is the maximum that Brown
can be fined for each violation. 	The Court exercises its
discretion to fine Brown less than the full amount for each
violation – $400 – despite the fact that it is clear from all the
evidence that none of Brown’s violations were inadvertent,
careless or even reckless. 	Rather, she repeatedly and
intentionally violated the statute, and close to the full
financial penalty appears to be needed to discourage such
outright and wholesale defiance of the law on her part. 	Further
violations may well be met with the largest fines permitted.
Page -27-
statute and is therefore fined $2,000 12 , which must be tripled
for her failure to disclose her identity. 	An appropriate
judgment will enter.
10. 	Regarding Jordan’s case, Brown violated § 110(b)(1) by
failing to put her name and address on the petition. 	Brown
violated § 110(b)(2) by failing to file a properly signed Form
19. 	Brown violated § 110(c) by failing to provide her social
security number. 	Brown violated § 110(e)(2) by practicing law by
informing Debtor about the need for credit counseling, explaining
exemptions, applying exemptions to Debtor’s property, classifying
debts as secured or priority, and informing Debtor that the
presumption did not arise. 	Brown violated § 110(h)(2) by failing
to disclose her fees. 	The Court finds that Brown shall forfeit
her fees in this case in the amount of $400, with such fees being
payable to the trustee Kelley Skehen. 	By attempting to hide her
connection to the case by failing to identify herself or provide
her social security numbers, the Court finds Brown’s actions
deceptive. 	In addition, by practicing law, she has engaged in a
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Page -28-
“fraudulent, unfair, or deceptive” act. 	Under § 110(i)(1) the
Court must order Brown to pay to the Debtor the greater of $2,000
or twice the amount paid, i.e., $2,000. Brown violated five
subsections of the statute and is therefore fined $2,000, which
must be tripled for her failure to disclose her identity. 	An
appropriate judgment will enter.
11. 	Regarding Lovato’s case, Brown violated § 110(b)(1) by
failing to put her name and address on the petition. 	Brown
violated § 110(b)(2) by failing to file a properly signed Form
19. 	Brown violated § 110(c) by failing to provide her social
security number. 	Brown violated § 110(e)(2) by practicing law by
informing Debtor about the need for credit counseling, explaining
exemptions, applying exemptions to Debtor’s property, classifying
debts as unsecured or priority, informing Debtor that the
presumption did not arise, and by telling her that the waiting
period between bankruptcies was only five years. 	Brown violated
§ 110(h)(2) by failing to disclose her fees. 	The Court finds
that Brown shall forfeit her fees in this case in the amount of
$395, with such fees being payable to the trustee Yvette
Gonzales. 	By attempting to hide her connection to the case by
failing to identify herself or provide her social security
numbers, the Court finds Brown’s actions deceptive. 	In addition,
by practicing law, she has engaged in an “fraudulent, unfair, or
deceptive” act. 	Under § 110(i)(1) the Court must order Brown to
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Page -29-
pay to the Debtor the greater of $2,000 or twice the amount paid,
i.e., $2,000. 	Brown violated five subsections of the statute and
is therefore fined $2,000, which must be tripled for her failure
to disclose her identity. 	An appropriate judgment will enter.
12. 	Regarding Robertson’s case, Brown violated § 110(b)(1) by
failing to put her name and address on the petition. 	Brown
violated § 110(b)(2) by failing to file a properly signed Form
19. 	Brown violated § 110(c) by failing to provide her social
security number. 	Brown violated § 110(e)(2) by practicing law by
informing Debtor about the need for credit counseling, explaining
exemptions, applying exemptions to Debtor’s property, classifying
debts as unsecured or priority, informing Debtor that the
presumption did not arise, and by filling out her schedule
regarding executory contracts and unexpired leases. 	Brown
violated § 110(h)(2) by failing to disclose her fees. 	The Court
finds that Brown shall forfeit her fees in this case in the
amount of $395, with such fees being payable to the trustee
Yvette Gonzales. 	By attempting to hide her connection to the
case by failing to identify herself or provide her social
security numbers, the Court finds Brown’s actions deceptive. 	In
addition, by practicing law, she has engaged in an “fraudulent,
unfair, or deceptive” act. 	Under § 110(i)(1) the Court must
order Brown to pay to the Debtor the greater of $2,000 or twice
the amount paid, i.e., $2,000. 	Brown violated five subsections
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Page -30-
of the statute and is therefore fined $2,000, which must be
tripled for her failure to disclose her identity. 	An appropriate
judgment will enter.
13. 	Regarding Castillo’s case, Brown violated § 110(b)(1) by
failing to put her name and address on the petition. 	Brown
violated § 110(b)(2) by failing to file a properly signed Form
19. 	Brown violated § 110(c) by failing to provide her social
security number. 	Brown violated § 110(e)(2) by practicing law by
informing Debtor about the need for credit counseling, explaining
exemptions, choosing federal exemptions and applying exemptions
to Debtor’s property, classifying debts as unsecured or priority,
and informing Debtor that the presumption did not arise. 	Brown
violated § 110(h)(2) by failing to disclose her fees. 	The Court
finds that Brown shall forfeit her fees in this case in the
amount of $395, with such fees being payable to the trustee Linda
Bloom. 	By attempting to hide her connection to the case by
failing to identify herself or provide her social security
numbers, the Court finds Brown’s actions deceptive. 	In addition,
by practicing law, she has engaged in an “fraudulent, unfair, or
deceptive” act. 	Under § 110(i)(1) the Court must order Brown to
pay to the Debtor the greater of $2,000 or twice the amount paid,
i.e., $2,000. 	Brown violated five subsections of the statute and
is therefore fined $2,000, which must be tripled for her failure
to disclose her identity. 	An appropriate judgment will enter.
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Page -31-
14. 	Regarding Roberts’ case, Brown violated § 110(b)(1) by
failing to put her name and address on the petition. 	Brown
violated § 110(b)(2) by failing to file a properly signed Form
19. 	Brown violated § 110(c) by failing to provide her social
security number. 	Brown violated § 110(e)(2) by practicing law by
informing Debtor about the need for credit counseling, explaining
exemptions, applying exemptions to Debtor’s property, classifying
debts as unsecured or priority, and informing Debtor that the
presumption did not arise. 	Brown violated § 110(h)(2) by failing
to disclose her fees. 	In addition, Brown prepared an amendment
for filing with the Court, and failed to disclose her name,
address and social security number and failed to prepare and file
the Form 19. 	The Court finds that Brown shall forfeit her fees
in this case in the amount of $295 plus $50 for the amendment,
with such fees being payable to the trustee Michael Caplan. 	By
attempting to hide her connection to the case by failing to
identify herself or provide her social security numbers, the
Court finds Brown’s actions deceptive. 	In addition, by
practicing law, she has engaged in an “fraudulent, unfair, or
deceptive” act. 	Under § 110(i)(1) the Court must order Brown to
pay to the Debtor the greater of $2,000 or twice the amount paid,
i.e., $2,000. 	Brown violated nine subsections of the statute
and is therefore fined $3,600, which must be tripled for her
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Page -32-
failure to disclose her identity. 	An appropriate judgment will
enter.
15. 	Regarding Lee-Tree’s case, Brown violated § 110(b)(1) by
failing to put her name and address on the petition. 	Brown
violated § 110(b)(2) by failing to file a properly signed Form
19. 	Brown violated § 110(c) by failing to provide her social
security number. 	Brown violated § 110(e)(2) by practicing law by
explaining exemptions, applying exemptions to Debtor’s property,
classifying debts as unsecured or priority, informing Debtor that
the presumption did not arise. 	Brown violated § 110(h)(2) by
failing to disclose her fees. 	The Court finds that Brown shall
forfeit her fees in this case in the amount of $395, with such
fees being payable to the trustee Michael Caplan. 	By attempting
to hide her connection to the case by failing to identify herself
or provide her social security numbers, the Court finds Brown’s
actions deceptive. 	In addition, by practicing law, she has
engaged in an “fraudulent, unfair, or deceptive” act. 	Under §
110(i)(1) the Court must order Brown to pay to the Debtor the
greater of $2,000 or twice the amount paid, i.e., $2,000. 	Brown
violated five subsections of the statute and is therefore fined
$2,000, which must be tripled for her failure to disclose her
identity. 	An appropriate judgment will enter.
16. 	Regarding the Padilla case, their attorney Daniels testified
regarding amendments he made to the statements and schedules
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Page -33-
originally filed by Brown. 	The Court finds that Brown omitted
her name, address, and social security number from the original
papers and failed to file form 19 and failed to disclose her
fees. 	Daniel’s testimony did not, however, provide a sufficient
basis for finding that Brown practiced law without a license in
this case. 	Nor did it establish the fees paid by Padilla to
Brown. 	The Court therefore finds four violations of § 110. 	By
attempting to hide her connection to the case by failing to
identify herself or provide her social security numbers, the
Court finds Brown’s actions deceptive. 	Under § 110(i)(1) the
Court must order Brown to pay to the Debtor the greater of $2,000
or twice the amount paid, i.e., $2,000. 	Brown violated four
subsections of the statute and is therefore fined $1,600, which
must be tripled for her failure to disclose her identity. 	An
appropriate judgment will enter.
17. 	Regarding the Trujillo case, Brown violated § 110(b)(1) by
failing to put her name and address on the petition. 	Brown
violated § 110(b)(2) by failing to file a properly signed Form
19. 	Brown violated § 110(c) by failing to provide her social
security number. 	Brown violated § 110(e)(2) by practicing law by
explaining the difference between chapters, explaining
exemptions, applying exemptions to Debtor’s property, listing the
debtors’ house as being owned JTWROS, classifying debts as
unsecured, secured or priority, informing Debtor that the
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Page -34-
presumption did not arise, and giving advice related to omitting
the home mortgage creditor from Schedules A and D. 	Brown
violated § 110(h)(2) by failing to disclose her fees. 	The Court
finds that Brown shall forfeit her fees in this case in the
amount of $395, with such fees being payable to the trustee
Yvette Gonzales. 	By attempting to hide her connection to the
case by failing to identify herself or provide her social
security numbers, the Court finds Brown’s actions deceptive. 	In
addition, by practicing law, she has engaged in an “fraudulent,
unfair, or deceptive” act. 	Brown violated five subsections of
the statute and is therefore fined $2,000, which must be tripled
for her failure to disclose her identity. 	An appropriate
judgment will enter.
18. 	Regarding the McBride case, Brown violated § 110(b)(1) by
failing to put her name and address on the petition. 	Brown
violated § 110(b)(2) by failing to file a properly signed Form
19. 	Brown violated § 110(c) by failing to provide her social
security number. 	Brown violated § 110(e)(2) by practicing law by
explaining the difference between chapters and explaining
exemptions, and applying exemptions to Debtor’s property. Brown
violated § 110(h)(2) by failing to disclose her fees. 	The Court
finds that Brown shall forfeit her fees in this case in the
amount of $395, with such fees being payable to the trustee
Yvette Gonzales. 	By attempting to hide her connection to the
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Page -35-
case by failing to identify herself or provide her social
security numbers, the Court finds Brown’s actions deceptive. 	In
addition, by practicing law, she has engaged in an “fraudulent,
unfair, or deceptive” act. 	Under § 110(i)(1) the Court must
order Brown to pay to the Debtor the greater of $2,000 or twice
the amount paid, i.e., $2,000. 	Brown violated five subsections
of the statute and is therefore fined $2,000, which must be
tripled for her failure to disclose her identity. 	An appropriate
judgment will enter.
20. 	A permanent injunction that will bar Brown from acting as a
bankruptcy petition preparer is necessary to prevent injury to an
unsuspecting public and alleviate the burden on the court system.
21. 	The Court lacks jurisdiction to enter any relief in this
proceeding for Ramirez because she never did file a bankruptcy.
She appeared only as a witness, not a plaintiff. 	Her remedies
lie in the state courts.
Honorable James S. Starzynski
United States Bankruptcy Judge
Date Entered on Docket: 	February 8, 2010
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Page -36-
APPENDIX A
§ 110. Penalty for persons who negligently or fraudulently
prepare bankruptcy petitions
(a) In this section--
(1) “bankruptcy petition preparer” means 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; and
(2) “document for filing” means 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.
(b) 	(1) A bankruptcy petition preparer who prepares a document
for filing shall sign the document and print on the document
the preparer's name and address. If a bankruptcy petition
preparer is not an individual, then an officer, principal,
responsible person, or partner of the bankruptcy petition
preparer shall be required to--
(A) sign the document for filing; and
(B) print on the document the name and address of that
officer, principal, responsible person, or partner.
(2) 	(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 Procedure.
(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, in addition to any
advice that the preparer may not give by reason of
subsection (e)(2); 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.
(c) 	(1) A bankruptcy petition preparer who prepares a document
for filing shall place on the document, after the preparer's
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signature, an identifying number that identifies individuals
who prepared the document.
(2) 	(A) Subject to subparagraph (B), for purposes of this
section, the identifying number of a bankruptcy
petition preparer shall be the Social Security account
number of each individual who prepared the document or
assisted in its preparation.
(B) If a bankruptcy petition preparer is not an
individual, the identifying number of the bankruptcy
petition preparer shall be the Social Security account
number of the officer, principal, responsible person,
or partner of the bankruptcy petition preparer.
(d) A bankruptcy petition preparer shall, not later than the time
at which a document for filing is presented for the debtor's
signature, furnish to the debtor a copy of the document.
(e) 	(1) A bankruptcy petition preparer shall not execute any
document on behalf of a debtor.
(2) 	(A) A bankruptcy petition preparer may not offer a
potential bankruptcy debtor any legal advice, including
any legal advice described in subparagraph (B).
(B) The legal advice referred to in subparagraph (A)
includes advising the debtor--
(i) whether--
(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 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.
(f) A bankruptcy petition preparer shall not use the word “legal”
or any similar term in any advertisements, or advertise under any
category that includes the word “legal” or any similar term.
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(g) A bankruptcy petition preparer shall not collect or receive
any payment from the debtor or on behalf of the debtor for the
court fees in connection with filing the petition.
(h) 	(1) The Supreme Court may promulgate rules under section
2075 of title 28, or the Judicial Conference of the United
States may prescribe guidelines, for setting a maximum
allowable fee chargeable by a bankruptcy petition preparer.
A bankruptcy petition preparer shall notify the debtor of
any such maximum amount before preparing any document for
filing for a debtor or accepting any fee from the debtor.
(2) A declaration under penalty of perjury by the bankruptcy
petition preparer shall be filed together with the petition,
disclosing any fee received from or on behalf of the debtor
within 12 months immediately prior to the filing of the
case, and any unpaid fee charged to the debtor. If rules or
guidelines setting a maximum fee for services have been
promulgated or prescribed under paragraph (1), the
declaration under this paragraph shall include a
certification that the bankruptcy petition preparer complied
with the notification requirement under paragraph (1).
(3) 	(A) The court shall disallow and order the immediate
turnover to the bankruptcy trustee any fee referred to
in paragraph (2) found to be in excess of the value of
any services--
(i) rendered by the bankruptcy petition preparer
during the 12-month period immediately preceding
the date of the filing of the petition; or
(ii) found to be in violation of any rule or
guideline promulgated or prescribed under
paragraph (1).
(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).
(C) An individual may exempt any funds recovered under
this paragraph under section 522(b).
(4) The debtor, the trustee, a creditor, the United States
trustee (or the bankruptcy administrator, if any) or the
court, on the initiative of the court, may file a motion for
an order under paragraph (2).
(5) A bankruptcy petition preparer shall be fined not more
than $500 for each failure to comply with a court order to
turn over funds within 30 days of service of such order.
(i) 	(1) If a bankruptcy petition preparer violates this section
or commits any act that the court finds to be fraudulent,
unfair, or deceptive, on the motion of the debtor, trustee,
United States trustee (or the bankruptcy administrator, if
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any), and after notice and a hearing, the court shall order
the bankruptcy petition preparer to pay to 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.
(2) If the trustee or creditor moves for damages on behalf
of the debtor under this subsection, the bankruptcy petition
preparer shall be ordered to pay the movant the additional
amount of $1,000 plus reasonable attorneys' fees and costs
incurred.
(j) 	(1) A debtor for whom a bankruptcy petition preparer has
prepared a document for filing, the trustee, a creditor, or
the United States trustee in the district in which the
bankruptcy petition preparer resides, has conducted
business, or the United States trustee in any other district
in which the debtor resides may bring a civil action to
enjoin a bankruptcy petition preparer from engaging in any
conduct in violation of this section or from further acting
as a bankruptcy petition preparer.
(2) 	(A) In an action under paragraph (1), if the court
finds that--
(i) a bankruptcy petition preparer has--
(I) engaged in conduct in violation of this
section or of any provision of this title;
(II) misrepresented the preparer's experience
or education as a bankruptcy petition
preparer; or
(III) engaged in any other fraudulent,
unfair, or deceptive conduct; and
(ii) injunctive relief is appropriate to prevent
the recurrence of such conduct, the court may
enjoin the bankruptcy petition preparer from
engaging in such conduct.
(B) If the court finds that a bankruptcy petition
preparer has continually engaged in conduct described
in subclause (I), (II), or (III) of clause (i) and that
an injunction prohibiting such conduct would not be
sufficient to prevent such person's interference with
the proper administration of this title, has not paid a
penalty imposed under this section, or failed to
disgorge all fees ordered by the court the court may
enjoin the person from acting as a bankruptcy petition
preparer.
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(3) The court, as part of its contempt power, may enjoin a
bankruptcy petition preparer that has failed to comply with
a previous order issued under this section. The injunction
under this paragraph may be issued on the motion of the
court, the trustee, or the United States trustee (or the
bankruptcy administrator, if any).
(4) The court shall award to a debtor, trustee, or creditor
that brings a successful action under this subsection
reasonable attorneys' fees and costs of the action, to be
paid by the bankruptcy petition preparer.
(k) Nothing in this section shall be construed to permit
activities that are otherwise prohibited by law, including rules
and laws that prohibit the unauthorized practice of law.
(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.
(2) The court shall triple the amount of a fine assessed
under paragraph (1) in any case in which the court finds
that a bankruptcy petition preparer--
(A) advised the debtor to exclude assets or income that
should have been included on applicable schedules;
(B) advised the debtor to use a false Social Security
account number;
(C) failed to inform the debtor that the debtor was
filing for relief under this title; or
(D) prepared a document for filing in a manner that
failed to disclose the identity of the bankruptcy
petition preparer.
(3) A debtor, trustee, creditor, or United States trustee
(or the bankruptcy administrator, if any) may file a motion
for an order imposing a fine on the bankruptcy petition
preparer for any violation of this section.
(4) 	(A) Fines imposed under this subsection in judicial
districts served by United States trustees shall be
paid to the United States trustees, who shall deposit
an amount equal to such fines in the United States
Trustee Fund.
(B) Fines imposed under this subsection in judicial
districts served by bankruptcy administrators shall be
deposited as offsetting receipts to the fund
established under section 1931 of title 28, and shall
remain available until expended to reimburse any
appropriation for the amount paid out of such
appropriation for expenses of the operation and
maintenance of the courts of the United States.
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Copies of these findings of fact
and conclusions of law will be
transmitted to:
Leonard K Martinez-Metzgar
Office of United States Trustee
PO Box 608
Albuquerque, NM 87103-0608
Pamela Brown, Southwest Bankruptcy Services
Southwest Document Services
2917 Carlisle Blvd., NE #211
Albuquerque, NM 87110
Terrence D. Martin
7201 Winans Dr NE
Albuquerque, NM 87109
Lynne M. Martin
7201 Winans Dr NE
Albuquerque, NM 87109
Timothy Felix Tree
10600 Cibola Loop NW #731
Albuquerque, NM 87114
Donna Katherine Lee-Tree
10600 Cibola Loop NW #731
Albuquerque, NM 87114
Thomas A Trujillo
700 Gold St
Raton, NM 87740
Geraldine M Trujillo
700 Gold St
Raton, NM 87740
Dan R McBride
P O Box 2086
Santa Fe, NM 87504
Jessica Lynn Robertson
10508 Constitution Ave
Albuquerque, NM 87112
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Kevin Lowe Roberts
10072 Menaul Blvd NE Apt E 21
Albuquerque, NM 87112
Scott E Castillo
1374 Fireweed Dr
Rio Rancho, NM 87144
Sharon C Lovato
6151 Airport Rd. #19
Santa Fe, NM 87507
Gerald R Velarde
Attorney for Sharon C Lovato
2531 Wyoming Blvd NE
Albuquerque, NM 87112-1027
Willie Cruz Padilla
104 Riata Trail SE
Rio Rancho, NM 87124
Rita Lee Padilla
104 Riata Trail SE
Rio Rancho, NM 87124
Michael K Daniels
Attorney for Willie Cruz Padilla
and Rita Lee Padilla
PO Box 1640
Albuquerque, NM 87103-1640
Robert Ernest Jordan
6300 Lamy St. NW
Albuquerque, NM 87120
Billie Jo Jordan
6300 Lamy St. NW
Albuquerque, NM 87120
Philip J. Montoya
Trustee
PO Box 159
Albuquerque, NM 87103
Michael J. Caplan
Trustee
827 E Santa Fe Ave
Grants, NM 87020-2458
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Yvette Gonzales
Trustee
PO Box 1037
Placitas, NM 87043-1037
Linda S. Bloom
Trustee
PO Box 218
Albuquerque, NM 87103-0218
Kelley L. Skehen
Trustee
625 Silver Avenue SW
Suite 350
Albuquerque, NM 87102-3111
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