The Supreme Court’s job is calling balls and strikes, and while I am not happy with their decision, they called the Milavetz case correctly.
The two things for the consumer to know is that BACPA (the act passed in 2005 that made bankruptcy more difficult and expensive) considers bankruptcy lawyers debt relief agencies and that bankruptcy lawyers cannot advise their client to take on more debt before filing bankruptcy.
Lets take this case one part at a time. The idea that Congress has lumped bankruptcy lawyers together with credit counseling, debt settlement agents, mortgage modification firms and other associated crooks is infuriating, but that is what the law that the banks paid for says.
The second and more nefarious part of this decision is that attorneys may not advise their clients to take on more debt prior to filing bankruptcy.
On its face, that makes common sense, but what about the automobile issue? Every few years, people will need to change cars. Buying a reliable car prior to bankruptcy has two positives for the client:
- A reliable vehicle is a necessity everywhere but the major metropolitan areas, and
- A reasonable car note that is kept in bankruptcy can serve as a means to improve one’s credit score after filing bankruptcy
Footnote 6 (which does not have the force of law) indicates that purchasing a car, buying groceries, paying medical bills or making purchases that a reasonable in anticipation of filing bankruptcy are acceptable.
While I am hesitant to advise a client based on a footnote, it seems to clear that the Supreme Court allows bankruptcy lawyers to have frank discussions with their clients about life.
While I am still infuriated by being lumped into a group of thieves, that was Congress’ doing, not the Supreme Court, and my representative Charlie Dent and my Senator Arlen Specter who both voted for this. I wonder if they would like a do-over considering the current economy. I’m going to email his office and let you know.
Oh, and perhaps Congress should be considered by a debt relief agency since they are the greatest group of crooks and frauds ever assembled.
