What’s an “assisted person” and why do I care?

08 Dec What’s an “assisted person” and why do I care?

The Bankruptcy Code was amended in 2005 to make it seem harder for people to file a bankruptcy case.  Most people who file bankruptcy cases are just like you.  Your debts constitute mostly “consumer debts”.  For today, let’s think of a “consumer debt” as a debt you incurred for your personal reasons and not for your business.  We’ll talk more about “consumer debts” another time.

If you are getting help from a bankruptcy lawyer, or anyone else trying to help you in a bankruptcy case, even if he or she is not a bankruptcy lawyer, you may be an “assisted person”.

If this sounds crazy, it is.  An “assisted person” is someone who has mostly “consumer debts” and less than $150,000 in property which is “non-exempt”.  That means most people who might want to file a bankruptcy case.

Why did Congress go out of its way to call you an “assisted person”?  In theory Congress wanted to “protect” you.  In practice, Congress wanted to make it harder for your lawyers to work with you.

Congress now requires lawyers and others to help people like you  – “assisted persons” to call themselves “Debt Relief Agencies”.  And Congress now requires “Debt Relief Agencies” to give you many warnings and advisory notices.  These notices are confusing and maybe even misleading.  But you will get them from your bankruptcy attorney.  Congress even tries to tell your lawyer what he or she can and cannot advise you, even if the advice is perfectly legal.

Justice Scalia just called this law “stupid” even though he thinks it might be constitutional.

So when your bankruptcy lawyer gives you papers with notices and calls himself a “Debt Relief Agency”, remember that he or she is doing this to comply with the law.  Ask your lawyer to explain everything to you in plain English (or whatever language you speak) even if the legally required jargon sounds like so much mumbo-jumbo to you.  That way, you’ll be treated like the client you are and not the “assisted person” Congress thinks you should be.

Lakelaw represents clients in bankruptcy cases in Illinois and Wisconsin

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Jay S. Fleischman is a bankruptcy lawyer with offices in Los Angeles and New York. He can often be found on Google+ and Twitter, where he shares information about consumer protection issues and personal finance.
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