Contact: John Hartgen
703-739-0800
BAPCPA’S REQUIREMENTS REGARDING ATTORNEY COMMUNICATION TO CLIENTS
ON DEBT ADVICE PRIOR TO BANKRUPTCY FILING FOUND TO BE OVERLY
RESTRICTIVE, ACCORDING TO
POLL
January 14, 2008,
Alexandria, Va. —A large majority of respondents (73
percent) in
latest online poll agreed that
size='2'>§526(a)(4), implemented by the 2005 bankruptcy law,
is overly restrictive and has a chilling effect on the speech of
attorneys seeking to advise clients to incur new debt prior to filing
for bankruptcy protection, and thus violates the First Amendment of the
Constitution. Sixty-three percent of respondents “strongly
agreed” and 10 percent “somewhat agreed” that
face='Arial' color='black' size='2'>§526(a)(4) is overly
restrictive and has a chilling effect on the speech of attorneys seeking
to advise clients to incur new debt prior to filing for bankruptcy
protection.
Seventeen percent of
respondents, however, did not agree that
color='black' size='2'>§526(a)(4) was overly restrictive and
has a chilling effect on the speech of attorneys seeking to advise
clients to incur new debt prior to filing for bankruptcy protection.
Thirteen percent “strongly disagreed” and 4 percent
“somewhat disagreed” that
size='2'>§526(a)(4) is overly restrictive and has a chilling
effect on the speech of attorneys seeking to advise clients to incur new
debt prior to filing for bankruptcy protection. Seven percent of the
respondents did not know or had no opinion on the issue.
The Bankruptcy Abuse Prevention
and Consumer Protection Act of 2005 (BAPCPA) created new
face='Arial' color='black' size='2'>§526(a)(4), which
prohibits 'debt relief agencies,' including attorneys, from providing
advice to clients to incur debt. In Olsen v. Gonzales, three
attorneys (two of whom represented consumer debtors in bankruptcies, and
one of whom advised clients regarding bankruptcies but did not file
bankruptcy petitions or represent clients in bankruptcy cases)
challenged the constitutionality of BAPCPA provisions prohibiting 'debt
relief agencies' from providing advice to clients to incur debt. The
court agreed that the restrictions on attorneys advising clients to
incur debt in contemplation of bankruptcy were constitutionally
overbroad.
size='3'>ABI
were welcome to submit their response to the statement: “Section
526(a)(4) is overly restrictive and has a chilling effect on the speech
of attorneys seeking to advise clients to incur new debt prior to filing
for bankruptcy protection, and thus violates the First Amendment of the
Constitution. (Olsen v. Gonzales, D.
w:st='on'>
05-6365-HO, 5/7/07)”
size='3'>ABI
title='blocked::http://www.abiworld.org/'
href='http://www.abiworld.org/'>www.abiworld.org.
w:st='on'>ABI
respond to a question on a timely bankruptcy or insolvency issue. Visit
href='http://www.abiworld.net/quickpoll/'>
color='#0000ff'>http://www.abiworld.net/quickpoll/ to access
the results of previous
Quick Polls.
###
size='3'>ABI
nonpartisan organization dedicated to research and education on matters
related to insolvency.
was founded in 1982 to provide Congress and the public with unbiased
analysis of bankruptcy issues. The
w:st='on'>ABI
attorneys, accountants, bankers, judges, professors, lenders, turnaround
specialists and other bankruptcy professionals, providing a forum for
the exchange of ideas and information. For additional information on
For additional conference information, visit
title='blocked::http://www.abiworld.org/conferences.html'
href='http://www.abiworld.org/conferences.html'>
color='#0000ff'>http://www.abiworld.org/conferences.html.