BAPCPA U.S Supreme Court Challenge: ABA, State Bars, AARP Weigh In

Today the American Bar Association filed an amicus brief in support of law firm Milavetz, Gallop & Milavetz’s challenge to the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), currently pending before the United States Supreme Court.

The ABA filing comes on the heels of another amicus brief in support of the challenge filed recently by the Connecticut Bar Association, the National Association of Consumer Banktruptcy Attorneys, the Brennan Center for Justice, and the American Association of Retired Persons.

BAPCPA was created to protect those ever-growing numbers of people in financial crisis from abusive or misleading conduct. Seems like a good thing, naturally – but things fall apart when you scrutinize the details.

According to the amici, the BAPCPA, as applied to lawyers:

  • improperly interferes with the regulation of lawyers by state judicial systems,
  • violates the First Amendment by regulating what lawyers say to their clients (including by requiring them to represent themselves as "debt relief agencies" which would be confusing, if not misleading, to consumers,
  • would erode the attorney-client privilege by limiting communications and requiring disclosure of information protected by this privilege.

Despite these issues, one might wonder what interest the AARP – a non-legal organization – has in these complaints by lawyers and their representative organizations.  According to the AARP, bankruptcy filings among people age 55 and older have risen dramatically in recent years, with the greatest increases among those 75 and older (up 566.7% between 1991 and 2007):

WIth limited job opportunities, stagnant incomes, and high medical costs, older people may have more difficulty paying debts or recovering financially if they are forced to file for bankruptcy. Planning for later years is made all the more difficult if they do not have complete and uncensored advice from attorneys relating to their financial planning, health, and long term care needs, including possibly filing for bankruptcy . . . the AARP has a substantial interest in ensuring that older people facing increased medical costs and limited income in their later years will have access to complete and uncensored legal advice without unwarranted governmental interference with the attorney-client relationship in the bankruptcy context.

Related:

Milavetz v. United States: American Bar Association Amicus Brief in Support of Petitioners

– Milavetz v. United States: Amicus Brief of National Association of Consumer Bankruptcy Attorneys, Connecticut Bar Association, Brennan Center for Justica and AARP

ABA Passes Resolution Opposing BAPCPA "Debt Relief Agency" Provisions

– ABA Resolution: Opposition to the Bankruptcy Abuse Prevention and Consumer Protection Act, P .L. 109-8 ("BAPCPA")

– JD Supra Information: Bankruptcy Law Center | Bankruptcy Law on Facebook | Bankruptcy Law on Twitter