FAQ: What is a Debt Relief Agency and Why Is It In All Bankruptcy Attorney Ads?

Susanne Robicsek
Bankruptcy Attorney
Chapter 7 and Chapter 13 Bankruptcy
Concentrating in Bankruptcy Law Since 1988

NC Bankruptcy Lawyer in Charlotte North Carolina for Chapter 7 / Chapter 13

Congress added language into the Bankruptcy Code in 2005 that said that anyone who is a "Debt Relief Agency" must do, or can't do, certain things such as giving out handouts, disclosures, fee contacts and give/not give certain advice. 

One of the requirements is that bankruptcy attorneys (and anyone else who fits the definition, whether or not they are an attorney) have to to say we are a Debt Relief Agency in any adverstisements we have.  

11 USC Section 101

(12A) The term "debt relief agency" means 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 under section 110,.......................

Because attorneys fit into this definition, they have to give the handouts and disclosures, and include the language in all advertisements saying that they are Debt Relief Agencies, just like someone without a law degree or special training. 

Lawyers do have skills and education, as well as being governed and guided by rules of the Bar Association.  Lawyers must use the term Debt Relief Agency but they are still lawyers who give people legal advice like they always have done. 

Because of this, you will see those words (or should see them) in any ad for anyone who discusses bankruptcy and is paid for it.  It doesn't mean that the person you speak to prepares and files bankruptcy, but is broad enough to include anyone who might discuss it as an option.

  • If you see the disclosure that someone is a Debt Relief Agency, it also doesn't mean that the person has any special skills or such to qualifiy them to give advice!
For lawyers, this is a really stupid requirement.  For non-lawyers it gives credibility for many who don't deserve it.

I am also pretty sure that many people, including lawyers, who give advice about bankruptcy DON'T include the language because they don't know they have to - which is not a good sign about their knowlege of bankruptcy and the requirements under the law.

I am not sure why Congress added this language, or why they defined it in a way that lawyers were covered but it requires lawyers, and anyone else who gives bankruptcy advice, to include the language about being a Debt Relief Agency and helping people file bankruptcy in all advertisements.  

Maybe they thought that lawyers were putting people into bankruptcy without telling them?  The notion is completely ridiculous, and I can say that if it has ever happened, it certainly is NOT what attorneys should do.  Not only would it be completely unethical, but they would risk their reputation and possibly their license to practice law too if they did so. 

So if you see the language, just mark it off as a weird government rule that appears to have no purpose - at least not that I can see.   I just call it stupid.

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DISCLAIMER: This message is intended as a general discussion of legal issues and not as a statement of fact, legal advice or a legal opinion. Personal opinions may also be expressed. No attorney-client relationship is created by this message. Do not act or rely upon law-related information in this communication without seeking the advice of an attorney licensed to practice in the relevant area.

The Law Office of Susanne M. Robicsek is
a Federally Designated Debt Relief Agency
under the Bankruptcy Code.
I file bankruptcy cases for people in financial need,
and have been doing so since 1989.

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