How come everyone is a debt relief agency?

If you’ve been searching around for a bankruptcy lawyer, you may have started wondering why nearly every one of them claims to be a “debt relief agency” or “federal debt relief agency.”

The answer turns out to be simple: since 2005, the bankruptcy code has mandated that lawyers include those words in public communications including advertisements. (On this site, you can find the magic words at the very bottom of the home page).

You might ask what possible point could be served by requiring bankruptcy attorneys to remind potential clients that they file bankruptcy cases. It seems that the disclaimer requirement was aimed at a few people in the last decade who would try to sell debtors on bankruptcy without stating so in so many words.

But with the plunge in the economy, the game has changed. Nowadays, there are plenty of “debt settlement services” trying to cash in on debtors misfortunes, and it only causes more confusion to force licensed lawyers to brand themselves as “debt relief agencies.”

Lawyers being the combative types that they are, a few have rebelled. In fact, one firm took the issue all the way to the United States Supreme Court, arguing that it was an infringement of their free speech rights. This past spring, in the case of Milavitz v. United States (discussed here), the Supremes voted to let the requirement stand, at least for the time being.

So for the foreseeable future, this is a debt relief agency. And if you live in Massachusetts or New Hampshire, don’t forget that we help people file bankruptcy cases under the bankruptcy code!


By Doug Beaton

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