Last summer, as part of my continuing BAPCPA Consumer Outline series, I posted an outline section entitled Attorneys as ‘Debt Relief Agencies’ — Court Decisions and Constitutional Challenges, in which I reviewed various cases winding their way through the federal courts challenging the constitutionality of BAPCPA’s "debt relief agency" provisions. Since then, I added this post on the decision of Dallas District Court Judge David C. Godbey upholding the constitutionality of most of BAPCPA’s "debt relief agency" provisions that were applicable to attorneys. Recent decisions handed down in other cases have been reported in the ABI BAPCPA Blog (here-S.D. Ga., here–Olsen–D.Or., and here-Geisenberger-E.D. Pa.), the Georgia Bankruptcy Blog (here–Zelotes-D.Ct.), and The Bankruptcy Lawyers Blog (here-Zelotes-D.Ct.). Sadly, none of these reported decisions found BAPCPA’s broad "debt relief agency" provisions inapplicable to attorneys, though they did tinker around the edges.
Alas, however, hope is not lost, for as reported at length in this recent post at the Georgia Bankruptcy Blog, the Honorable James M. Rosenbaum, Chief Judge of the Minnesota District Courts (himself a Reagan appointee and outspoken critic of the federal sentencing guidelines), last week broke new ground and declared that attorneys are NOT "debt relief agents" under BAPCPA! Milavetz, Gallop & Milavetz v. United States, 2006 WL 3524399, (D. Minn. 12/7/06) (pdf) (pleadings – see Sec. III.B.1).
Unlike the only other court decision reaching the same conclusion (first reported here and recently dismissed based on lack of standing by the US Trustee), this decision finds principled grounds for holding the "debt relief agency" provisions unconstitutional — and hence inapplicable — when applied to attorneys.
Stay tuned, as now there is a split among the district courts, and one can only hope that these issues make their way to the US Supreme Court. Meanwhile, however, rumor has it that consumer bankruptcy lawyers in Minnesota are privately calling Judge Rosenbaum "NEO."
© Steve Jakubowski 2006
The following BAPCPA-related papers, arranged by abstract ID number, can be downloaded from the 
Last summer I posted a 
The following finance bankruptcy-related papers, arranged by abstract ID number, can be downloaded from the 
The following business bankruptcy-related papers, arranged by abstract ID number, can be downloaded from the 
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I suppose that moment comes in everyone’s life. The first time someone calls you a “grandfather” (or the geriatric equivalent thereof). I faced that first reality check yesterday from, of all places, The Daily Bankruptcy Review, which ran 
Today, glasses in some halls of Congress are probably clinking in honor of BAPCPA’s first birthday. But is America really better off? Are creditors really getting paid more because fewer consumers file for bankruptcy? The one major advantage to a bankruptcy case is that it’s a collective proceeding that minimizes the “agency” or collection costs that few unsecured (or deficiency) creditors would reasonably be willing to bear alone. At least in theory, therefore, bankruptcy provided enhanced recoveries for unsecured creditors by minimizing "collective action problems." Such rational thinking was a prime impetus behind passage of the Bankruptcy Code in 1978, and most practitioners, Judges, and academics would tell you that this reasoning remains valid to this day. As neatly summed up by Professor Doug Baird in a great article entitled "A World Without Bankruptcy" (published at 
In the end, I suspect that unsecured creditors as a whole will suffer from BAPCPA’s restoration of "collective action problems." Time (and some very much needed academic research) will tell. In the meantime, we’ll instead send our happy birthday wishes to Chicago’s own