May 2006
Attorney Melchionne participates in Federal Court lawsuit cllenging Bankruptcy Law
Thursday, May 11 2006 Filed in:
What's New
Attorney Eugene S. Melchionne was named as a Plaintiff in a lawsuit
filed in U.S. District Court in Hartford on Thursday asking that
parts of the new Bankruptcy law be ruled unconstitutional. The
group of the Connecticut Bar Association, the National Association
of Consumer Bankruptcy Attorneys, and several Connecticut and out
of state attorneys are claiming that the new Bankruptcy law treats
attorneys the same as unlicensed document preparers or credit
counseling firms by requiring specific language to potential
clients. That illegally hampers the attorney-client relationship,
the lawsuit argues, and might even prevent lawyers from
recommending that clients hire them in the first place. Attorneys
say legal advice isn't one-size-fits-all. "Someone could be down
and out but have access to a student loan to go to school for
retraining," said attorney Barry S. Feigenbaum, who filed the suit.
"We couldn't advise that client to take that student loan."
Car repairs, medical bills and court-ordered child support are listed in the lawsuit as examples of added debt that might keep clients working and out of jail. In some cases, lawyers say borrowing against a 401(k) retirement plan or accessing a home equity line of credit might make sense. "I cannot advise them to take these steps," Waterbury attorney Eugene S. melchionne wrote. "They need my help, my legal advice, but I am no longer able to advise them what to do."
The law is written so broadly, Feigenbaum argues, that it also restricts the advice given by divorce attorneys and others who don't handle bankruptcy cases. He said the law also violates the rights of bankruptcy petitioners to have lawyers help them with their cases. "The statute injects the government directly into the heart of the attorney-client relationship in a way that would be both grave and unprecedented," the lawsuit states.
The Justice Department was looking into the lawsuit Friday morning.
The Connecticut Bar Association and the National Association of Consumer Bankruptcy Attorneys asked a judge to temporarily rule that attorneys are not covered by the provisions until the case is settled. Other provisions challenged in the lawsuit include requirements that agencies provide standardized legal advice forms and contracts for their clients and advertise themselves as "debt relief agencies." Attorneys say those restrictions should not apply to them.
Car repairs, medical bills and court-ordered child support are listed in the lawsuit as examples of added debt that might keep clients working and out of jail. In some cases, lawyers say borrowing against a 401(k) retirement plan or accessing a home equity line of credit might make sense. "I cannot advise them to take these steps," Waterbury attorney Eugene S. melchionne wrote. "They need my help, my legal advice, but I am no longer able to advise them what to do."
The law is written so broadly, Feigenbaum argues, that it also restricts the advice given by divorce attorneys and others who don't handle bankruptcy cases. He said the law also violates the rights of bankruptcy petitioners to have lawyers help them with their cases. "The statute injects the government directly into the heart of the attorney-client relationship in a way that would be both grave and unprecedented," the lawsuit states.
The Justice Department was looking into the lawsuit Friday morning.
The Connecticut Bar Association and the National Association of Consumer Bankruptcy Attorneys asked a judge to temporarily rule that attorneys are not covered by the provisions until the case is settled. Other provisions challenged in the lawsuit include requirements that agencies provide standardized legal advice forms and contracts for their clients and advertise themselves as "debt relief agencies." Attorneys say those restrictions should not apply to them.
