What’s a “Debt Relief Agency”?

usa-badge“As a debt relief agency, we help people file for bankruptcy.” These words appear on every page of this website, and you may have noticed similar language in marketing materials from other bankruptcy attorneys. Why?

There’s something awkward and forced about that sentence, like a political ad telling you, “I approve this message.” The candidate’s line is required by law, and not surprisingly, so is the bankruptcy lawyer’s “debt relief agency” statement.

Bankruptcy Attorneys as Debt Relief Agencies

In 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) was signed into law. BAPCPA, a controversial overhaul of the federal bankruptcy laws, introduced a new term, “debt relief agency.” Under the post-BAPCPA Bankruptcy Code, a debt relief agency 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, or who is a bankruptcy petition preparer….”

At first there was some disagreement about whether the term includes bankruptcy lawyers. But in Milavetz, Gallop & Milavetz, P.A. v. United States, the U.S. Supreme Court held that bankruptcy attorneys fall within the definition of a debt relief agency.

Given the broad language used to define a debt relief agency, it’s not surprising the Supreme Court reached this conclusion. Still, the term isn’t very clear or helpful.

Please Be Advised

So federal law says I’m a debt relief agency, but why do I have to tell you that?

Another provision of BAPCPA requires debt relief agencies to “clearly and conspicuously use the following statement in [any] advertisement: ‘We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.’ or a substantially similar statement.” Since the law allows for some wording variation, I’ve shortened that down to a single sentence.

It seems Congress was concerned about misleading advertisements that promoted bankruptcy services while falsely implying that non-bankruptcy debt help was being offered instead. Of course, no reputable lawyer would do such a thing. I’ve always made it clear that I help people file for bankruptcy in Indianapolis, and I’m proud to do so.

Matt Conrad is an Indianapolis bankruptcy attorney and the founder of Conrad Legal LLC, which helps people in Central Indiana get out of debt with Chapter 7 and Chapter 13.

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