In yesterday’s blog, I suggested that some attorneys – namely on Craigslist – were not complying with the BAPCPA imposed requirement that they disclose that they are a “debt relief agency.” That might not have been completely fair.
Certainly, when an attorney fits into the definition of a “debt relief agency”, they must disclose that fact and are obligated to comply with additional disclosure requirements. But, if an attorney does not fit into the definition of a “debt relief agency”, may they still represent individuals in consumer bankruptcy matters? The answer is yes… and that raises some interesting questions.
Yesterday, I summarized who is considered a debt relief agency under the Bankruptcy Code. But an attorney – say for example, yours truly – can choose to simply not be a debt relief agency and thus not be subject to the requirements set forth in Section 526. How? Well, I can choose not to provide any services to “assisted persons.”
Who are those “assisted persons”? The Bankruptcy Code (post BAPCPA) defines them as folks with primarily consumer debts and who have nonexempt property worth less than approximately $164,000. Nonexempt assets are those that must either be liquidated in chapter 7, or the value of which must be paid within the structure of a debtor’s confirmed chapter 11 or 13 plan. If a person with primarily consumer debts has only exempt assets, then technically, they are not an “assisted person.” Thus, for those folks, I am technically not a debt relief agency.
Ready for more hair-splitting?
Under the Rules of Professional Conduct – the rules that attorneys have to abide by in order to ethically and legally do their job - I cannot make statements in advertisements that are false or are misleading. I am a debt relief agency (as defined by the Code) to certain individuals with primarily consumer debtors and who have unexempt assets up to a certain dollar amount.
But, I am not a debt relief agency to individuals who have business debts. I am not a debt relief agency to businesses. And I am not a debt relief agency to individuals with primarily consumer debts who have unexempt assets that exceed that certain dollar amount. Indeed, I am a debt relief agency under the bankruptcy code for only certain people, in certain circumstances.
So is the bankruptcy code requiring me to mislead businesses, those with a higher amounts of unexempt assets, or those individuals who do not have primarily consumer debts by identifying myself as something that I legally (and factually) am not? It might be a stretch, but it also might be an unintended consequence of what appears to be an utterly pointless law.
With all of that said, I think it’s fair to say that I legitimately and legally call myself a debt relief agency when I am only a debt relief agency some of the time. It reminds me of a scene from Working Girl when Joan Cusak (Cyn) tells Melanie Griffith (Tess): “Sometimes I sing and dance around the house in my underwear. It doesn’t make me Madonna. Never will.”
Alas, just because I qualify as a debt relief agency only some of the time, doesn’t mean I am a debt relief agency all of the time.
And this is particularly important, because tomorrow, I’ll be talking about what “debt relief agencies” can and cannot do, and what they must do…
Related posts:
- Debt Relief Agencies… Part II
- A Headache on a Friday Afternoon
- “We Are A Debt Relief Agency…”
- The Morality of Seeking Debt Relief
- Co-Debtor Stay in Chapter 13: The Debtor’s Business
Tags: attorneys, Bankruptcy Abuse Prevention & Consumer Protection Act of 2005, BAPCPA, Craigslist, Debt Relief Agencies, Exemptions, Petition Preparers and Fees, Unexempt assets