Robert Naugles prepared his own bankruptcy so thought he would charge others for preparing their documents. Sanctioned by Bankruptcy Court.

Naugles assumed “the courthouse staff would point out any errors.”
NOTE – the Court staff is not allowed to give any legal advice or even point out errors in the forms. Now you know more than Naugles knew, but please don’t offer to prepare bankruptcy documents.

After filing for bankruptcy in 2011, Robert Naugles figured he could earn some money by helping others do the same.  This has not worked out for Naugles.  He has been cited for contempt, ordered to repay clients, fined $1,000 and is facing possible criminal charges.  “You took a boatload of money from these…folks, and what you did caused them more trouble than it solved,” Chief Bankruptcy Court Judge Pamela Pepper told Naugles this year when she ordered him to refund $931 to three clients and pay the $1,000 fine.

What are bankruptcy preparers? They are non-lawyers who “help” people fill out legal documents. They have plagued the Arizona residents since mid-1990s.

Federal law mandates that the preparers do nothing more than fill out bankruptcy forms using information provided by clients. They are not permitted to provide any legal advice. Which means they cannot answer questions, explain the different types of bankruptcy and much, much more.

To say the judge was disgusted was an understatement.

document preparer

Really smelly advice

Judge Pepper found that Naugles overcharged clients and made key errors on their filings.   When asked what training he had in filing bankruptcy documents he replied “I learned after doing mine and a friend’s,” Naugles said.  He said he thought he was filling out the forms correctly. If there were omissions, he counted on courthouse staff to point those out.

This is certainly not how someone becomes a responsible document preparer.  They would have education and experience in the area of law where they are preparing documents.

These are just a few problems caused by a document preparer:

  • Paying for services never rendered
  • Botched bankruptcy filings
  • Excessive fees not allowed in bankruptcy.
  • Targeting the poor
  • Targeting minorities
  • Targeting the elderly
  • Errors on a bankruptcy filing can result in the case being dismissed and debtors losing the protection from creditors that bankruptcy provides. Debtors can then lose possession of their assets, such as a car, or face foreclosure
  • Debtor losing assets that they did not need to lose (like their tax refunds)
  • Debtor facing criminal charges for failure to disclose assets
  • Debtor being sued by omitted creditors
  • Debtor losing their home or vehicle because the document prepare gave them bad legal advice
  • Debtor’s family faced with repaying monies received from Debtor
  • the list goes on and on

Washington, a document preparer, said that the job of a petition preparer is frustrating and not very lucrative.  She said she does it only because, as an out-of-work typist, she needs the job.  She no formal education about bankruptcy.   She agreed there are risks inherent in the petition preparation business.  “It’s a very dangerous profession to be in if you’re not a lawyer,” Judge Pepper said.

Chapter 7 is not something that you can dip your toe into in order to check the temperature of the water.  It is something that you jump into and can only be rescued from it if you show cause”  In re Dreamstreet, 221, B.R. 724 (Bankr. W.D. Tex. 1998)

At least once a week I hear a report of someone filing bankruptcy and then trying to get out because they do not like the way things are going.

You can see from the quote above that this is not so simple.  Only a judge can release you from a chapter 7, and then only after you show good cause.  How hard is it to show “good cause”, some courts are not inclined to allow a debtor to dismiss their chapter 7, other courts are more lenient.  Why take that chance? Talk to an experienced bankruptcy attorney who will give you proper advice about the challenges and rewards of bankruptcy (most offer free consultations, like our office).

Would you do your own surgery?

In the medical arena this would be similar to starting your open heart surgery only to have you try to leave the operating table halfway through the surgery.  Perhaps you should think about the surgery before laying down on the operating table.

I know this is a harsh sentiment, but bankruptcy, like open heart surgery, should not be taken lightly.

We have several videos on our web site.  Below are a few that might be of interest:

  • “Why Do I Offer Free Legal Advice?”
  • “Options in Bankruptcy, with Notes on Getting Help”
  • “Meet Ms. Drain and Suggestions on How to Hire an Attorney”






The Bankruptcy Courts and the Department of Justice are coming down harder and harder on document preparers because the damage they are doing to innocent people who file for bankruptcy.   At least once a week I receive a call from someone trying to fix a problem caused by using a document preparer or a “mass production” law firm (some who advertises on the TV or paid ads on the Internet).

The Arizona Bankruptcy Court has a Self-Help Center, staffed with volunteer attorneys.  Also, most consumer bankruptcy attorneys will offer a free consultation.  Take advantage of the free resources before deciding what is best for you.  Once you file bankruptcy you cannot unring that bell.