In the recent case of In re Reyes, ___B.R. ___, 2007 WL 136934 (Bkrtcy.S.D. Fla.), Judge A. Jay Cristol of the Bankruptcy Court of Southern District of Florida issued an important decision as to the “debt relief agency” provisions of BAPCPA as applied to attorneys. Judge Cristol adopted the recent decision of Milavetz v. United States, 355 B.R. 758 (D. Minn. 2006) and held that 11 U.S.C. section 526, 527, and 528 are unconstitutional as applied to attorneys.
But following the doctrine of constitutional avoidance, the Court addressed the other issues raised to resolve them on other than constitutional grounds. The Court found that sections 526, 527, and 528 infringe on the State’s traditional role of regulating attorneys and therefore should not apply to attorneys. The Court reasoned that these sections were directed at bankruptcy petition preparers and not attorneys.
The Court further held on the doctrine of constitutional avoidance, that even assuming that the
sections were constitutional and that they applied to attorneys, that since the involved attorney did not receive “money or other valuable consideration”, that the attorney does not fit within the statutory definition of a debt relief agency as set forth in section 101(12A).
