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.