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Milavetz, Gallop & Milavetz, P.A. v. United States
United States Supreme Court
559 U.S. 229, 130 S. Ct. 1324 (2010)
Congress enacted the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCA) to correct abuses in the bankruptcy system. BAPCPA reform measures included provisions that regulate bankruptcy professionals who help consumers file bankruptcy. One rule specifically prohibited debt-relief agencies from advising consumers to incur more debt or pay an attorney or someone who prepares a bankruptcy petition a fee or charge to prepare a petition or to represent the consumer in bankruptcy proceedings. Two attorneys at the law firm Milavetz, Gallop & Milavetz, P.A., and two of its clients (collectively Milavetz) (plaintiffs) filed a preenforcement suit asking the court to declare that the rule did not apply to attorneys, such that attorneys could advise their clients to incur additional debt. The district court concluded that the term “debt relief agency” did not include attorneys, but the appellate court reversed. Noting a split among the circuits on the issue, the Supreme Court granted review.
Rule of Law
Holding and Reasoning (Sotomayor, J.)
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