What’s a “Debt Relief Agency”? One of a series

17 Dec What’s a “Debt Relief Agency”? One of a series

Anyone who has been thinking of filing a bankruptcy case has seen that law firms who file bankruptcy cases call themselves “Debt Relief Agencies”. This isn’t an accident.

This is Congress’ way of trying to protect you. Now, don’t you feel much better? I thought so.

According to the Bankruptcy Code, a Debt Relief Agency is, with a few exceptions:

any person who provides any bankruptcy assistance to an assisted person in return for the payment of money or other valuable consideration, or who is a bankruptcy petition preparer

We’ve already discussed what “bankruptcy assistance” is here. And an “assisted person” basically means you, a client or prospective client.

Congress has tried to tell Debt Relief Agencies what to say and how to say it. We lawyers certainly want to obey the law. But we also want to give you the best advice we can consistent with the law. Because of this, you might sometimes find us saying weird things like:

Under the Bankruptcy Code, we can’t advise you to take on more debt just before you file a bankruptcy case. On the other hand, it is not illegal to enter into a retail installment contract for a used car while you still have credit as long as you plan to pay for it. By the way, if you are paying my firm in installments before filing your case, I haven’t advised you to take on more debt.

Even some of the Supreme Court justices thought that this was a “stupid law” even though it might well be a constitutional law. For more about this case, click here.

Lawyers on the Bankruptcy Law Network know how to make the Bankruptcy Code work for you even if Congress was trying to make it hard. Lakelaw represents people and business in bankruptcy in Northern Illinois and Southern Wisconsin.

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