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CRM 500-999

877. Knowing Disregard of Bankruptcy Laws—18 U.S.C. § 156

This section punishes a bankruptcy petition preparer, i.e., bankruptcy petition or typing mills, whose knowing disregard of the Bankruptcy Code or Rules causes a bankruptcy petition or proceeding to be dismissed. A "bankruptcy petition preparer" is anyone, other than the debtor's attorney or that attorney's employee, who for compensation prepares bankruptcy documents for filing.

18 U.S.C. § 156(b) provides:

If a bankruptcy case or related proceeding is dismissed because of a knowing attempt by a bankruptcy petition preparer in any manner to disregard the requirements of title 11, United States Code, or the Federal Rules of Bankruptcy Procedure, the bankruptcy petition preparer shall be fined...imprisoned not more than 1 year, or both.

This offense is a Class A misdemeanor. The term "related proceeding" covers all proceedings in bankruptcy court. The acts proscribed in this statute need only be done knowingly. They do not have to be done fraudulently.

NOTE: Civil fines and injunctive relief against bankruptcy petition preparers who do not disclose their name, address, social security number, and their compensation for preparing documents are included in 11 U.S.C. § 110. The civil fines and injunctive relief under 11 U.S.C. § 110 are available for either an intentional or negligent disregard of the provisions of the Bankruptcy Code.

[cited in JM 9-41.001]