Prior to the BAPCPA of 2005 a bankruptcy attorney was just a bankruptcy attorney. When the bankruptcy code was being amended, the credit industry hired lobbyists to push Congress into tightening the screws with the bankruptcy industry. There was a provision added to the law that required a bankruptcy attorney to identify themselves as a debt relief agency. Congress said they added it to the bankruptcy code for consumer protection, but in reality, it shut the door on many bankruptcy lawyers that work for large law firms. Prior to 2005, you could go to just about any large law firm and hire a bankruptcy attorney if you can afford it, after the changes the law firms didn't want to be recognized as a debt relief agency and stopped taking any personal bankruptcy filings.
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It is true, there is still a large number of small law firms that employ bankruptcy lawyers. Most of them are sole proprietors and specialize in filing bankruptcy for consumers. Now, because of the changes to the bankruptcy law, the high-priced legal practitioners that helped shape the law are gone.
The reason the law firms walked away from practicing personal bankruptcy is because of the requirement to contain the disclosure in all their advertising. If a bankruptcy attorney were to represent a client and a personal bankruptcy, under the Bankruptcy Reform Act, the entire legal practice would become under the jurisdiction of the debt relief agency. If the law office advertised it would be required to include a disclosure stating that they are a debt relief agency and they help people filing bankruptcy under the bankruptcy code. This statement is embarrassing for law firms that would have to place this as a disclosure on their website, brochures and any advertisement they run. For the large law firm, it wasn't worth the money to continue pursuing bankruptcy filings.
The good news is Congress hasn't eliminated filing bankruptcy as of yet. It's still easy to find a bankruptcy attorney that will suit one's needs and help the individual protect their family's assets. As time goes on, it seems that the government is continuing to lean towards protecting corporate America over the consumers. It's understandable how the credit industry would spend whatever it would cost to adapt the consumer bankruptcy laws to benefit them. The downside to losing the help of the large law firms, is the ability and resources to challenge the law to benefit the consumer. Currently, a bankruptcy attorney will have to find creative ways to adapt the law to benefit their client.
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