A paperfuck is any document that can totally screw you such as: a lawsuit, legal charges, failing grades on a transcript, a police report, etc. etc.
It can also be used a verb.
Cop: I know that you know where the suspect is, now tell me where he's hiding or I will paperfuck you out of this university so fast!
UCLA Student: I swear I don't know, I think he has friends in Santa Cruz.
Daniel: How are you doing man?
Kyle: Awesome, I totally just paperfucked the guy who slashed my tires.