Interpreting 11 U.S.C. § 110 which Governs Conduct of Non-Lawyer Bankruptcy Petition Preparers & Delineating the Relationship, Powers & Functions of the Bankruptcy Court & the District Court Under the Statute

*605 In the fall of 1994, as part of the Bankruptcy Reform Act of 1994, Congress passed a new statute ( 11 U.S.C. § 110 ) (“the statute”) which, for the first time, governs the activities of non-lawyer bankruptcy petition preparers (“preparers”) and provides various sanctions against them for improper actions. The statute is not clearly worded and definitive legislative history which would aid in interpreting it is lacking. As of the date of this General Order, no opinions of appellate *606 courts exist which construe the statute. 1

This district, the Central District of California, is often referred to as the “bankruptcy capital” of the country. Far more bankruptcy cases are filed here than in any other federal district. In fact, more bankruptcies are filed in this district than in any of nine entire circuits. This district has 21 Bankruptcy Judges. The next largest Bankruptcy Court has 12.

Many non-lawyer bankruptcy preparers operate in this district. A number of them are headquartered here and have branches or subsidiary operations elsewhere. Even before enactment of the statute, the Bankruptcy Court of this district had encountered serious problems with many local preparers…