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U.S. Supreme Court to Determine Constitutionality of Some BAPCPA Rules

Posted By admin || 22-Jun-2009

The U.S. Supreme Court has agreed to review and determine the constitutionality of two key provisions in the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA).

This fall the court will determine:

Who qualifies as a "debt relief agency"?

Under §526 of the statute, a debt relief agency is defined as "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."

What are the required disclosures?

Under §528 of the Act, debt relief agencies must disclose the following in all of their advertising materials: "We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code," or a similar statement.

Many bankruptcy attorneys argue that they should not be considered debt relief agencies, but if they are, then the requirements under the statute violate their First Amendment rights. Many bankruptcy attorneys consider the disclosure requirements to be confusing for clients and simply designed to deter people from filing bankruptcy.

Categories: Bankruptcy
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