February 2, 2008
UST Suspends Audits due to Lack of Funding
This is from the UST Website.
"The FY 2008 Consolidated Appropriations Act, Public Law 110-161, provided no funding for debtor audits. As a result, the USTP has suspended its designation of cases subject to audit and has notified the independent accounting firms performing the audits. The Program is pursuing alternative sources of funding to permit it to resume the designation of cases subject to audit and, if successful, intends to reinstate the audits."
My understanding is that the audits were resulting in very few findings of wrongdoing. That may be, of course, because people were worried about the audits and stopped cheating so much.
February 1, 2008
Does "Debt Relief Agency" include attorneys?
Henry Sommer of the National Association of Consumer Bankruptcy Attorneys ("NACBA") has filed a great amicus brief in Olsen v. Mukaskey case in Oregon. I have attached it here. The District Court ruled that Section 526(a)(4) is an unconstitutional abridgment of free speech. As to the advertising requirements of Section 528, the District Court upheld the argument that those requirements apply to attorneys. The brief makes the following observations:
1) The DRA rules do not apply to attorneys. DRA is a BAPCPA created concept that the "experts" who wrote the amendments invented. There is no history behind it. It is defined as including petition preparers who are defined in Section 110 to exclude attorneys.
2) The amendments were supposedly created to protect debtors. Therefore a DRA must inform the prospective debtor that he has the right to hire an attorney which is nonsensical if it applies to attorneys.
3) If DRA applies to attorneys, Congress has taken away some of the power of the state to oversee the activities of attorneys.
4) As to advertising, there has never been any showing that attorney advertisements were "a problem" before the amendments. When figuring out what Congress meant, it is reasonable to look at the problem it was trying to solve.
5) The concept of debt relief agency will confuse the public into thinking that somehow attorneys are now associated with some sort of government agency. Plus it equates attorneys with paid preparers which will cause confusion.
6) The DRA rules may apply to family law attorneys and creditor's attorneys even though they do not help consumers file for bankruptcy.