Michigan Bankruptcy Attorneys

Choosing a Bankruptcy Lawyer in Michigan

Detroit Chapter 7 and Chapter 13 Consumer Bankruptcy Filings

Board Certified Consumer Bankruptcy Specialist Walter Metzen

American Board of Bankruptcy Certification

Bankruptcy Law in Michigan/ Debt Relief Agency

Q: Does the fact that an attorney provides pro bono representation on behalf of a client in bankruptcy, without more, qualify the attorney as a “debt relief agency,” as defined in section 101(12A) of the Bankruptcy Code, so as to subject the attorney, or the attorney’s law firm, to the restrictions and affirmative obligations set forth in sections 526-528 of the Bankruptcy Code?

A: Section 101(12A) defines a “debt relief agency” 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 under section 110.”  By definition, pro bono counsel do not receive, and do not expect to receive, payment of money from their clients in exchange for their services. The plain language of section 101(12A) states that a person must provide assistance “in return for the payment of money or other valuable consideration” in order to be considered a debt relief agency.  Therefore, the United States Trustee Program’s position is that attorneys who represent debtors pro bono do not qualify as debt relief agencies.  See, e.g., United States Trustee’s Response to Motion Pursuant to 11 U.S.C. 105 Finding that Debtor’s Attorney is not a Debt Relief Agency as that Term is Defined in 11 U.S.C. 101(12A) for Services Rendered in Connection with this Pro Bono Bankruptcy Case, In re Dow, Case no. 06-13460 (Bankr. N.D.N.Y. 2007) [PDF - 557 KB].

 

Q: Often attorneys or law firms receive credit with state licensing authorities, or general recognition within the community, for their contribution of pro bono services. If an attorney, or law firm, receives such credit or recognition for their pro bono representation of a client in bankruptcy, does that fall within the definition of “other valuable consideration” so as to render the attorney, or their law firm, a “debt relief agency” and subject them to the restrictions and affirmative obligations set forth in sections 526-528 of the Bankruptcy Code?

A: Although not specifically defined under the Bankruptcy Code, “valuable consideration” commonly involves a “pecuniarily beneficial interest.” Black’s Law Dictionary 326 (8th ed. 2004).  In addition, “consideration” is defined as “something (such as an act, a forbearance, or a return promise) bargained for and received by a promisor from a promisee” Black’s Law Dictionary 324 (8th ed. 2004).  A client that is represented pro bono does not have any control over the credit given by the state licensing authorities and such credit is not part of the agreement between the attorney and the client.  Similarly, the client has no control over whether the pro bono representation will result in recognition or good will within the community.  Therefore, the United States Trustee Program’s position is that such credit or recognition does not constitute “other valuable consideration” so as to qualify the attorney or the attorney’s law firm as a debt relief agency.  See, e.g., United States Trustee’s Response to Motion Pursuant to 11 U.S.C. 105 Finding that Debtor’s Attorney is not a Debt Relief Agency as that Term is Defined in 11 U.S.C. 101(12A) for Services Rendered in Connection with this Pro Bono Bankruptcy Case, In re Dow, Case no. 06-13460 (Bankr. N.D.N.Y. 2007) [PDF - 557 KB].
 

 

Q: Does the attorney certification in 11 U.S.C. 707(b)(4)(D) extend to the Statement of Financial Affairs?

A: Pursuant to 707(b)(4)(D), the signature of an attorney on a petition constitutes a certification that the attorney “has no knowledge after an inquiry that the information in the schedules filed with such petition is incorrect.” The section refers only to the schedules and not the Statement of Financial Affairs. However, the Statement of Financial Affairs may be considered as “any paper” filed with the court and could be subject to Rule 9011.

  

Q: To what property does the $150,000 exclusion from the “assisted person” definition apply?

A: An “assisted person” is defined in 11 U.S.C. 101(3) to mean “any person whose debts consist primarily of consumer debts and the value of whose nonexempt property is less than $150,000.” Under that definition, a person who owns a home valued at $200,000 and lives in a State with a $45,000 homestead exemption would not qualify as an “assisted person” since the value of the nonexempt property would be $155,000.

  

Q: Will the United States Trustee give “advisory opinions” on 11 U.S.C. 527 and 528 disclosures?

A: United States Trustees should not and will not pre-approve a debt relief agency’s advertising, contract, or disclosures.

  

Q: What direction can the United States Trustee give attorneys regarding what constitutes “reasonable inquiry under the circumstances” for purposes of attorney liability?

A: The attorney certification included in 11 U.S.C. 707(b)(4)(C) is substantially similar to the requirements of Fed. R. Bankr. P. 9011, which is substantially similar to Fed. R. Civ. P. 11. An attorney should look to those rules and the case law interpreting them for guidance.

 

Bankruptcy Basics - For Cases Filed on or after October 17, 2005 (pdf)
Bankruptcy Basics - For Cases Filed before October 17, 2005 (pdf)


   
Contact me, Detroit bankruptcy lawyer Walter Metzen today to schedule your free initial consultation. I also offer clients flexible appointment times and same day appointments if necessary. Get in touch with me today to learn how filing bankruptcy may be beneficial for you and your family. Why should you hire a Board Certified Bankruptcy Specialist? Click Here. My office has handled over 10,000 bankruptcy cases in Michigan and will apply this experience to your case as well. My office prides itself on fast, detailed, personal service. There are many different aspects to a bankruptcy case. Some of the different aspects are listed on the links below for you to explore. If you have any questions while exploring this site or would like a free personal bankruptcy consultation, contact my office at (313) 962-4656 or toll free 888-777-FILE.

 Contact me, bankruptcy attorney Walter Metzen to learn more about how I can help you get a Fresh Financial Start!.

 Be sure to Obtain a copy of your Credit Report after your Michigan Bankruptcy Filing and check it for Mistakes.

Contact me, bankruptcy attorney Walter Metzen to learn more about how the new Chapter 7 bankruptcy law may affect your case. I offer a free initial consultation so we can discuss your case personally.

We are a Debt Relief Agency helping people file for bankruptcy relief under the Bankruptcy Code. Let us help you decide if bankruptcy is right for you.

Bankruptcy attorney Walter Metzen represents clients throughout Southeast Michigan, including the communities of Detroit, Southfield, Warren, Roseville, Farmington Hills, Ann Arbor, Belleville, Canton, Clinton Township, Dearborn, Dearborn Heights, Hamtramck, Highland Park, Holland, Howell, Lincoln Park, Livonia, Macomb, Northville, Plymouth, Port Huron, Redford, Rochester, Saginaw, Southfield, Sterling Heights, Taylor, Trenton, Troy, Westland, Wyandotte, Ypsilanti, Mount Clemens, Howell, Oakland County, Macomb County, Wayne County, Washtenaw County, Livingston County, and all of the surrounding areas.

 


 

 

 

 Content Footer
 

Walter Metzen
645 Griswold, Suite 3156
Penobscot Building
Detroit MI 48226
Map & Directions

Phone:(313) 962-4656
Fax:(313) 962-4241
Email: 8884walter@sbcglobal.net
Toll Free(888) 777-FILE
 (888) 4WALTER
Michigan Board Certified Consumer Bankruptcy Specialist Walter Mezen, American Board of Certification American Bankruptcy Institute 313-962-4656 Toll Free: 888-777-FILE