Firm Files Suit Over Bankruptcy Reform Law

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A local law firm has filed suit challenging provisions of the bankruptcy reform law, claiming the new law is unconstitutional because it potentially limits attorneys' ability to speak with their clients about financial matters.

The suit, filed by the firm Gallop and Milavetz, claims that the law is so vague in defining what it means by the term "debt relief agencies" when referring to the mandatory financial education provisions for bankruptcy filers, that it limits the attorneys' ability to "ethically and competently advise and represent their clients and illegally restricts the attorneys' right to free speech."

The credit union-backed law limits the type of advise debt relief agencies can give clients about incurring more debt while they are contemplating bankruptcy. This could be interpreted as preventing attorneys from discussing all aspects of future financial planning with their clients, according to the suit.

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