2 Personal Bankruptcy Cases To Be Heard At U.S. Supreme Court Today

The U.S. Supreme Court was slated to hear 2 separate cases involving personal bankruptcy issues today.

The first case, United States of America v. Milavetz, Gallop & Milavetz, challenges the constitutionality of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005 with regard to whether bankrutpcy attorneys are considered debt relief agencies. 

The other case is United Student  Aid Fund v Espinosa, which seeks to determine the proper procedure for discharging student loan debt in a Chapter 13 bankruptcy proceeding.

In Milavetz, the law firm sued the United States seeking a declaratory judgment that certain provisions of BAPCPA _ 11 U.S. Code Section 526 _ do not apply to attorneys and law firms.

A divided 8th Circuit held thta under the language of the BAPCPA attorneys who offer bankruptcy advice fall under the definition of debt relief agencies.

In Espinosa, the lender contends that current law allows student loan debtors to discharge their own debts in bankruptcy without proving the debts pose an "undue hardship."

More information as transcripts are available.

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