United States v. Milavetz, Gallop & Milavetz, P. A., et al.

Questions presented

SCOTUS records, cert granted 8 Jun 2009

1. Section 526(a)(4) of Title 11 of the United States Code provides that bankruptcy professionals who qualify as "debt relief agencies" and who are hired by consumer debtors for bankruptcy services may not advise those debtors "to incur more debt in contemplation of" filing a bankruptcy petition. The questions presented are as follows:
2. Whether Section 526(a)(4) precludes only advice to incur more debt with a purpose to abuse the bankruptcy system.
3. Whether Section 526(a)(4), construed with due regard for the principle of constitutional avoidance, violates the First Amendment.

Opinion summary

Etalia.ai summary of the majority opinion

The case addressed whether certain provisions of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) applied to attorneys. Specifically, it examined if lawyers providing bankruptcy assistance were considered 'debt relief agencies' under the act and thus subject to its advertising restrictions. The Supreme Court held that attorneys are indeed debt relief agencies when they provide qualifying services, such as advising clients on restructuring their debts or filing for bankruptcy protection. Consequently, these legal professionals must comply with BAPCPA's requirements, including specific disclosures in advertisements about their services being related to debt relief through bankruptcy filings. The decision reinforced Congress’s intent to regulate misleading practices by ensuring transparency in how legal advice is marketed concerning consumer bankruptcies.