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Lawyers group files suit against new federal bankruptcy law

[JURIST] The National Association of Consumer Bankruptcy Attorneys (NACBA) [group website] and the Connecticut Bar Association [group website] have filed a lawsuit [complaint, PDF] arguing that the new federal bankruptcy law [JURIST report] enacted in October 2005, unlawfully impedes the attorney-client relationship [press release, DOC] by restricting the advice lawyers may give to their clients, and by failing to differentiate between attorneys and unlicensed document preparers or credit counseling firms. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 [text, PDF] makes it more difficult to file for bankruptcy by requiring credit counseling and mandating above-average earners to file under the restrictive Chapter 13 [text]. Congress enacted the law in an attempt to curb abuses by gamblers, compulsive shoppers and multi-millionaires.

Earlier this year the NACBA released [news release] a report [PDF text] that criticized the new law [JURIST report] for doing little to stop abuses of the bankruptcy system and placing unnecessary hurdles in front of people with legitimate reasons to file for bankruptcy. AP has more.

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