What Is a ‘Debt Relief Agency’?
Ideally the process of completing a Las Vegas bankruptcy would go as smoothly as possible. Debtors would choose their lawyers, gather the appropriate information, sign the petition and file it. Unfortunately, Congress doesn’t see it that way, and when it amended the bankruptcy code in 2005, it created additional hurdles for you and your Las Vegas bankruptcy lawyer to overcome on your way to your discharge. One of them is requiring lawyers to tell debtors that they are “debt relief agencies.” What does this mean?
According to the bankruptcy code, a “debt relief agency” is, “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.” In other words, it’s your lawyer. An “assisted person” is “any person whose debts consist primarily of consumer debts and the value of whose nonexempt property is less than $150,000,” or your typical debtor who is looking to file a Chapter 7 or Chapter 13 bankruptcy and not a business owner.
Why is this important? The bankruptcy code now contains three new sections (526-528) that in practice frustrate the formation of an attorney-client relationship regarding bankruptcy services. “Debt relief agencies” are required to market their services according to particular guidelines, and they must provide “assisted persons”—i.e. you—with warnings and notices, as though debtors are buying tobacco products. All this paperwork can be confusing, but that’s partly the point.
If you need help handling your debt matters, don’t sweat these legalistic details. They’re designed to discourage you from seeking the protection you deserve. Instead, ask your bankruptcy attorney to explain everything carefully, and proceed from there.
For more questions about bankruptcy in Las Vegas, please feel free to contact an experienced Freedom Law Firm Las Vegas bankruptcy attorney for a free initial consultation. Call us at 1-702-745-8584 to set up your free consultation.