Contact: John Hartgen
703-739-0800
BAPCPA’S
RESTRICTION ON ATTORNEY ADVICE IS UNCONSTITUTIONAL, ACCORDING TO LATEST
ABI QUICK POLL
May 8, 2009,
Alexandria, Va. — A majority of
respondents (59 percent) in a recent ABI Quick Poll thought that
BAPCPA’s restriction on attorney advice concerning a
debtor’s acquisition of pre-petition debt is unconstitutional on
its face. Fifty percent “disagreed strongly” and 9 percent
“somewhat disagreed” with the statement that the
“restriction within the Bankruptcy Abuse
Prevention and Consumer Protection Act of 2005 on
attorney advice concerning a debtor’s acquisition of pre-petition
debt is not unconstitutional on its face.”
size='3'>Section 526(a)(4) of the Bankruptcy Abuse Prevention and
Consumer Protection Act of 2005 provides that a 'debt relief agency' may
not advise a client (whether or not in bankruptcy) to incur more debt in
contemplation of such person filing a case, or to pay an attorney or
bankruptcy petition preparer fee or charge for services performed as
part of preparing. A 'debt relief agency' under this section 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.” (11 U.S.C. 101(12A)).
In a departure from rulings by
the U.S. Court of Appeals for the Eighth Circuit and several lower
courts, the U.S. Court of Appeals for the Fifth Circuit held in
Susan B. Hersh v. United States of
America, No. 07-10226 (5th Cir. 12/18/08),
that §526(a)(4) passes constitutional scrutiny and that attorneys
could be considered 'debt relief agencies.'
Thirty-three percent of
respondents agreed that BAPCPA’s restriction on attorney advice
concerning a debtor’s acquisition of pre-petition debt is not
unconstitutional on the surface. Twenty-seven percent “agreed
strongly” and 6 percent “somewhat agreed” that
§526(a)(4) is not unconstitutional.
size='3'>Seven percent of respondents did not know or had no opinion on
the issue.
ABI members and members of the
public were welcome to submit their response to the statement:
“BAPCPA’s restriction on attorney advice concerning a
debtor’s acquisition of pre-petition debt [sec 526(a)(4)] is not
unconstitutional on its face.
size='3'>Hersh v. United States (5th Cir.
12/18/08).”
ABI’s Quick Poll is posted on
ABI’s home page,
face='Calibri' size='3'>www.abiworld.org
size='3'>. ABI members and the public are invited to respond to a
question on a timely bankruptcy or insolvency issue. Visit
href='http://www.abiworld.net/quickpoll/'>
color='#0000ff' size='3'>http://www.abiworld.net/quickpoll/
to access the results of previous ABI
Quick Polls.
###
ABI is the largest multi-disciplinary,
nonpartisan organization dedicated to research and education on matters
related to insolvency. ABI was founded in 1982 to provide Congress and
the public with unbiased analysis of bankruptcy issues. The ABI
membership includes nearly 12,000 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 ABI, visit
href='http://www.abiworld.org/'>
size='3'>www.abiworld.org. For
additional conference information, visit
href='http://www.abiworld.org/conferences.html'>
color='#0000ff'
size='3'>http://www.abiworld.org/conferences.html
face='Calibri' size='3'>.