11 U.S.C. § 110 — Penalty for persons who negligently or

Page 41 TITLE 11—BANKRUPTCY § 110 United States pursuant to section 104 of this title as follows: By notice dated Jan. 31, 2022, 87 F.R. 6625, effective Apr. 1, 2022, in subsec. (e), dollar amounts ‘‘419,275’’ and ‘‘1,257,850’’ were adjusted to ‘‘465,275’’ and ‘‘1,395,875’’, respectively, each time they appeared. See notice of the Judicial Conference of the United States set out as a note under section 104 of this title. By notice dated Feb. 5, 2019, 84 F.R. 3488, effective Apr. 1, 2019, in subsec. (e), dollar amounts ‘‘394,725’’ and ‘‘1,184,200’’ were adjusted to ‘‘419,275’’ and ‘‘1,257,850’’, respectively, each time they appeared. By notice dated Feb. 16, 2016, 81 F.R. 8748, effective Apr. 1, 2016, in subsec. (e), dollar amounts ‘‘383,175’’ and ‘‘1,149,525’’ were adjusted to ‘‘394,725’’ and ‘‘1,184,200’’, respectively, each time they appeared. By notice dated Feb. 12, 2013, 78 F.R. 12089, effective Apr. 1, 2013, in subsec. (e), dollar amounts ‘‘360,475’’ and ‘‘1,081,400’’ were adjusted to ‘‘383,175’’ and ‘‘1,149,525’’, respectively, each time they appeared. By notice dated Feb. 19, 2010, 75 F.R. 8747, effective Apr. 1, 2010, in subsec. (e), dollar amounts ‘‘336,900’’ and ‘‘1,010,650’’ were adjusted to ‘‘360,475’’ and ‘‘1,081,400’’, respectively, each time they appeared. By notice dated Feb. 7, 2007, 72 F.R. 7082, effective Apr. 1, 2007, in subsec. (e), dollar amounts ‘‘307,675’’ and ‘‘922,975’’ were adjusted to ‘‘336,900’’ and ‘‘1,010,650’’, re- spectively, each time they appeared. By notice dated Feb. 18, 2004, 69 F.R. 8482, effective Apr. 1, 2004, in subsec. (e), dollar amounts ‘‘290,525’’ and ‘‘871,550’’ were adjusted to ‘‘307,675’’ and ‘‘922,975’’, re- spectively, each time they appeared. By notice dated Feb. 13, 2001, 66 F.R. 10910, effective Apr. 1, 2001, in subsec. (e), dollar amounts ‘‘269,250’’ and ‘‘807,750’’ were adjusted to ‘‘290,525’’ and ‘‘871,550’’, re- spectively, each time they appeared. By notice dated Feb. 3, 1998, 63 F.R. 7179, effective Apr. 1, 1998, in subsec. (e), dollar amounts ‘‘250,000’’ and ‘‘750,000’’ were adjusted to ‘‘269,250’’ and ‘‘807,750’’, re- spectively, each time they appeared. § 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 di- rect supervision of such attorney, who pre- pares 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 pre- pares a document for filing shall sign the docu- ment and print on the document the preparer’s name and address. If a bankruptcy petition pre- parer is not an individual, then an officer, prin- cipal, responsible person, or partner of the bank- ruptcy petition preparer shall be required to— (A) sign the document for filing; and (B) print on the document the name and ad- dress of that officer, principal, responsible per- son, or partner. (2)(A) Before preparing any document for fil- ing or accepting any fees from or on behalf of a debtor, the bankruptcy petition preparer shall provide to the debtor a written notice which shall be on an official form prescribed by the Ju- dicial Conference of the United States in accord- ance with rule 9009 of the Federal Rules of Bank- ruptcy Procedure. (B) The notice under subparagraph (A)— (i) shall inform the debtor in simple lan- guage 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 pre- parer 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 pen- alty of perjury, by the bankruptcy petition preparer; and (II) be filed with any document for filing. (c)(1) A bankruptcy petition preparer who pre- pares a document for filing shall place on the document, after the preparer’s signature, an identifying number that identifies individuals who prepared the document. (2)(A) Subject to subparagraph (B), for pur- poses of this section, the identifying number of a bankruptcy petition preparer shall be the So- cial 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 bank- ruptcy petition preparer shall be the Social Se- curity 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 fil- ing is presented for the debtor’s signature, fur- nish 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 subpara- graph (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 dis- charged 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 prom- ise to repay debts to a creditor or enter into a reaffirmation agreement with a creditor to re- affirm a debt; (vi) concerning how to characterize the na- ture 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 Page 42 TITLE 11—BANKRUPTCY § 110 that includes the word ‘‘legal’’ or any similar term. (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 Judi- cial Conference of the United States may pre- scribe guidelines, for setting a maximum allow- able 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 the debtor or accepting any fee from or on behalf of the debtor. (2) A declaration under penalty of perjury by the bankruptcy petition preparer shall be filed together with the petition, disclosing any fee re- ceived 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)— (i) found to be in excess of the value of any services rendered by the bankruptcy petition preparer during the 12-month period imme- diately 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 re- covered under this paragraph under section 522(b). (4) The debtor, the trustee, a creditor, the United States trustee (or the bankruptcy admin- istrator, if any) or the court, on the initiative of the court, may file a motion for an order under paragraph (3). (5) A bankruptcy petition preparer shall be fined not more than $500 for each failure to com- ply with a court order to turn over funds within 30 days of service of such order. (i)(1) If a bankruptcy petition preparer vio- lates this section or commits any act that the court finds to be fraudulent, unfair, or decep- tive, on the motion of the debtor, trustee, United States trustee (or the bankruptcy admin- istrator, if 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 dam- ages on behalf of the debtor under this sub- section, 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 ac- tion to enjoin a bankruptcy petition preparer from engaging in any conduct in violation of this section or from further acting as a bank- ruptcy 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 experi- ence or education as a bankruptcy petition preparer; or (III) engaged in any other fraudulent, un- fair, or deceptive conduct; and (ii) injunctive relief is appropriate to pre- vent 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 peti- tion preparer has continually engaged in con- duct 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 ad- ministration 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 en- join the person from acting as a bankruptcy pe- tition preparer. (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 prohib- ited by law, including rules and laws that pro- hibit 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 ap- plicable schedules; Page 43 TITLE 11—BANKRUPTCY § 110 (B) advised the debtor to use a false Social Security account number; (C) failed to inform the debtor that the debt- or was filing for relief under this title; or (D) prepared a document for filing in a man- ner that failed to disclose the identity of the bankruptcy petition preparer. (3) A debtor, trustee, creditor, or United States trustee (or the bankruptcy adminis- trator, if any) may file a motion for an order im- posing a fine on the bankruptcy petition pre- parer for any violation of this section. (4)(A) Fines imposed under this subsection in judicial districts served by United States trust- ees 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 ju- dicial districts served by bankruptcy adminis- trators shall be deposited as offsetting receipts to the fund established under section 1931 of title 28, and shall remain available until ex- pended to reimburse any appropriation for the amount paid out of such appropriation for ex- penses of the operation and maintenance of the courts of the United States. (Added Pub. L. 103–394, title III, § 308(a), Oct. 22, 1994, 108 Stat. 4135; amended Pub. L. 109–8, title II, § 221, title XII, § 1205, Apr. 20, 2005, 119 Stat. 59, 194; Pub. L. 110–161, div. B, title II, § 212(b), Dec. 26, 2007, 121 Stat. 1914; Pub. L. 111–327, § 2(a)(7), Dec. 22, 2010, 124 Stat. 3558.) Editorial Notes REFERENCES IN TEXT The Federal Rules of Bankruptcy Procedure, referred to in subsec. (b)(2)(A), are set out in the Appendix to this title. AMENDMENTS 2010—Subsec. (b)(2)(A). Pub. L. 111–327, § 2(a)(7)(A), in- serted ‘‘or on behalf of’’ after ‘‘from’’. Subsec. (h)(1). Pub. L. 111–327, § 2(a)(7)(B)(i), in last sentence, substituted ‘‘filing for the debtor’’ for ‘‘filing for a debtor’’ and inserted ‘‘or on behalf of’’ after ‘‘from’’. Subsec. (h)(3)(A). Pub. L. 111–327, § 2(a)(7)(B)(ii)(I), struck out ‘‘found to be in excess of the value of any services’’ after ‘‘paragraph (2)’’ in introductory provi- sions. Subsec. (h)(3)(A)(i). Pub. L. 111–327, § 2(a)(7)(B)(ii)(II), inserted ‘‘found to be in excess of the value of any serv- ices’’ after ‘‘(i)’’. Subsec. (h)(4). Pub. L. 111–327, § 2(a)(7)(B)(iii), sub- stituted ‘‘paragraph (3)’’ for ‘‘paragraph (2)’’. 2007—Subsec. (l)(4)(A). Pub. L. 110–161 amended sub- par. (A) generally. Prior to amendment, subpar. (A) read as follows: ‘‘Fines imposed under this subsection in judicial districts served by United States trustees shall be paid to the United States trustee, who shall de- posit an amount equal to such fines in a special ac- count of the United States Trustee System Fund re- ferred to in section 586(e)(2) of title 28. Amounts depos- ited under this subparagraph shall be available to fund the enforcement of this section on a national basis.’’ 2005—Subsec. (a)(1). Pub. L. 109–8, § 221(1), substituted ‘‘for the debtor or an employee of such attorney under the direct supervision of such attorney’’ for ‘‘or an em- ployee of an attorney’’. Subsec. (b)(1). Pub. L. 109–8, § 221(2)(A), inserted at end ‘‘If a bankruptcy petition preparer is not an indi- vidual, then an officer, principal, responsible person, or partner of the bankruptcy petition preparer shall be re- quired to—’’ and added subpars. (A) and (B). Subsec. (b)(2). Pub. L. 109–8, § 221(2)(B), added par. (2) and struck out former par. (2) which read as follows: ‘‘A bankruptcy petition preparer who fails to comply with paragraph (1) may be fined not more than $500 for each such failure unless the failure is due to reasonable cause.’’ Subsec. (c)(2). Pub. L. 109–8, § 221(3)(A), designated ex- isting provisions as subpar. (A), substituted ‘‘Subject to subparagraph (B), for purposes’’ for ‘‘For purposes’’, and added subpar. (B). Subsec. (c)(3). Pub. L. 109–8, § 221(3)(B), struck out par. (3) which read as follows: ‘‘A bankruptcy petition pre- parer who fails to comply with paragraph (1) may be fined not more than $500 for each such failure unless the failure is due to reasonable cause.’’ Subsec. (d). Pub. L. 109–8, § 221(4), struck out par. (1) designation before ‘‘A bankruptcy petition preparer shall’’ and struck out par. (2) which read as follows: ‘‘A bankruptcy petition preparer who fails to comply with paragraph (1) may be fined not more than $500 for each such failure unless the failure is due to reasonable cause.’’ Subsec. (e)(2). Pub. L. 109–8, § 221(5), added par. (2) and struck out former par. (2) which read as follows: ‘‘A bankruptcy petition preparer may be fined not more than $500 for each document executed in violation of paragraph (1).’’ Subsec. (f). Pub. L. 109–8, § 221(6), struck out par. (1) designation before ‘‘A bankruptcy petition preparer shall not’’ and struck out par. (2) which read as follows: ‘‘A bankruptcy petition preparer shall be fined not more than $500 for each violation of paragraph (1).’’ Subsec. (g). Pub. L. 109–8, § 221(7), struck out par. (1) designation before ‘‘A bankruptcy petition preparer shall not’’ and struck out par. (2) which read as follows: ‘‘A bankruptcy petition preparer shall be fined not more than $500 for each violation of paragraph (1).’’ Subsec. (h)(1). Pub. L. 109–8, § 221(8)(B), added par. (1). Former par. (1) redesignated (2). Subsec. (h)(2). Pub. L. 109–8, § 221(8)(A), (C), redesig- nated par. (1) as (2), substituted ‘‘A’’ for ‘‘Within 10 days after the date of the filing of a petition, a bank- ruptcy petition preparer shall file a’’, inserted ‘‘by the bankruptcy petition preparer shall be filed together with the petition,’’ after ‘‘perjury’’, and inserted at end ‘‘If rules or guidelines setting a maximum fee for serv- ices have been promulgated or prescribed under para- graph (1), the declaration under this paragraph shall in- clude a certification that the bankruptcy petition pre- parer complied with the notification requirement under paragraph (1).’’ Former par. (2) redesignated (3). Subsec. (h)(3). Pub. L. 109–8, § 221(8)(D), added par. (3) and struck out former par. (3) which read as follows: ‘‘The court shall disallow and order the immediate turnover to the bankruptcy trustee of any fee referred to in paragraph (1) found to be in excess of the value of services rendered for the documents prepared. An indi- vidual debtor may exempt any funds so recovered under section 522(b).’’ Pub. L. 109–8, § 221(8)(A) redesignated par. (2) as (3). Former par. (3) redesignated (4). Subsec. (h)(4). Pub. L. 109–8, § 221(8)(E), substituted ‘‘the United States trustee (or the bankruptcy adminis- trator, if any) or the court, on the initiative of the court,’’ for ‘‘or the United States trustee’’. Pub. L. 109–8, § 221(8)(A) redesignated par. (3) as (4). Former par. (4) redesignated (5). Subsec. (h)(5). Pub. L. 109–8, § 221(8)(A) redesignated par. (4) as (5). Subsec. (i)(1). Pub. L. 109–8, § 221(9), inserted introduc- tory provisions and struck out former introductory provisions which read as follows: ‘‘If a bankruptcy case or related proceeding is dismissed because of the failure to file bankruptcy papers, including papers specified in section 521(1) of this title, the negligence or intentional disregard of this title or the Federal Rules of Bank- ruptcy Procedure by a bankruptcy petition preparer, or if a bankruptcy petition preparer violates this section or commits any fraudulent, unfair, or deceptive act, the bankruptcy court shall certify that fact to the dis- Page 44 TITLE 11—BANKRUPTCY § 111 trict court, and the district court, on motion of the debtor, the trustee, or a creditor and after a hearing, shall order the bankruptcy petition preparer to pay to the debtor—’’. Subsec. (j)(2)(A)(i)(I). Pub. L. 109–8, § 221(10)(A)(i), struck out ‘‘a violation of which subjects a person to criminal penalty’’ after ‘‘any provision of this title’’. Subsec. (j)(2)(B). Pub. L. 109–8, § 221(10)(A)(ii), sub- stituted ‘‘has not paid a penalty’’ for ‘‘or has not paid a penalty’’ and inserted ‘‘or failed to disgorge all fees ordered by the court’’ after ‘‘a penalty imposed under this section,’’. Subsec. (j)(3). Pub. L. 109–8, § 221(10)(C) added par. (3). Former par. (3) redesignated (4). Subsec. (j)(4). Pub. L. 109–8, § 1205, substituted ‘‘attor- neys’’ for ‘‘attorney’s’’. Pub. L. 109–8, § 221(10)(B), redesignated par. (3) as (4). Subsec. (l). Pub. L. 109–8, § 221(11), added subsec. (l). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2005 AMENDMENT Amendment by Pub. L. 109–8 effective 180 days after Apr. 20, 2005, and not applicable with respect to cases commenced under this title before such effective date, except as otherwise provided, see section 1501 of Pub. L. 109–8, set out as a note under section 101 of this title. EFFECTIVE DATE Section effective Oct. 22, 1994, and not applicable with respect to cases commenced under this title before Oct. 22, 1994, see section 702 of Pub. L. 103–394, set out as an Effective Date of 1994 Amendment note under section 101 of this title. § 111. Nonprofit budget and credit counseling agencies; financial management instructional courses (a) The clerk shall maintain a publicly avail- able list of— (1) nonprofit budget and credit counseling agencies that provide 1 or more services de- scribed in section 109(h) currently approved by the United States trustee (or the bankruptcy administrator, if any); and (2) instructional courses concerning personal financial management currently approved by the United States trustee (or the bankruptcy administrator, if any), as applicable. (b) The United States trustee (or bankruptcy administrator, if any) shall only approve a non- profit budget and credit counseling agency or an instructional course concerning personal finan- cial management as follows: (1) The United States trustee (or bankruptcy administrator, if any) shall have thoroughly reviewed the qualifications of the nonprofit budget and credit counseling agency or of the provider of the instructional course under the standards set forth in this section, and the services or instructional courses that will be offered by such agency or such provider, and may require such agency or such provider that has sought approval to provide information with respect to such review. (2) The United States trustee (or bankruptcy administrator, if any) shall have determined that such agency or such instructional course fully satisfies the applicable standards set forth in this section. (3) If a nonprofit budget and credit coun- seling agency or instructional course did not appear on the approved list for the district under subsection (a) immediately before ap- proval under this section, approval under this subsection of such agency or such instruc- tional course shall be for a probationary pe- riod not to exceed 6 months. (4) At the conclusion of the applicable proba- tionary period under paragraph (3), the United States trustee (or bankruptcy administrator, if any) may only approve for an additional 1- year period, and for successive 1-year periods thereafter, an agency or instructional course that has demonstrated during the proba- tionary or applicable subsequent period of ap- proval that such agency or instructional course— (A) has met the standards set forth under this section during such period; and (B) can satisfy such standards in the fu- ture. (5) Not later than 30 days after any final de- cision under paragraph (4), an interested per- son may seek judicial review of such decision in the appropriate district court of the United States. (c)(1) The United States trustee (or the bank- ruptcy administrator, if any) shall only approve a nonprofit budget and credit counseling agency that demonstrates that it will provide qualified counselors, maintain adequate provision for safekeeping and payment of client funds, pro- vide adequate counseling with respect to client credit problems, and deal responsibly and effec- tively with other matters relating to the qual- ity, effectiveness, and financial security of the services it provides. (2) To be approved by the United States trust- ee (or the bankruptcy administrator, if any), a nonprofit budget and credit counseling agency shall, at a minimum— (A) have a board of directors the majority of which— (i) are not employed by such agency; and (ii) will not directly or indirectly benefit financially from the outcome of the coun- seling services provided by such agency; (B) if a fee is charged for counseling services, charge a reasonable fee, and provide services without regard to ability to pay the fee; (C) provide for safekeeping and payment of client funds, including an annual audit of the trust accounts and appropriate employee bonding; (D) provide full disclosures to a client, in- cluding funding sources, counselor qualifica- tions, possible impact on credit reports, and any costs of such program that will be paid by such client and how such costs will be paid; (E) provide adequate counseling with respect to a client’s credit problems that includes an analysis of such client’s current financial con- dition, factors that caused such financial con- dition, and how such client can develop a plan to respond to the problems without incurring negative amortization of debt; (F) provide trained counselors who receive no commissions or bonuses based on the out- come of the counseling services provided by such agency, and who have adequate experi- ence, and have been adequately trained to pro- vide counseling services to individuals in fi-