§526 Restrictions on Debt Relief Agencies

Summary

Debt relief agencies must keep promises and be honest. They cannot fail to do services they told a client they would do in a bankruptcy case. They cannot give false or misleading statements or tell a client to put wrong information in bankruptcy papers. They must not hide or misstate what services they will provide or the benefits and risks of filing for bankruptcy. They also cannot tell someone to borrow more money to prepare for bankruptcy or to pay fees to get ready for a bankruptcy case. A client cannot be forced to give up these protections, though the agency might still be held to them. Contracts that break these key rules are void and not enforceable except by the client. If an agency intentionally or negligently breaks these rules or causes a case to be dismissed or converted by failing to file required papers, the agency must return fees it got, pay actual damages, and cover reasonable lawyer fees and costs. State officials can sue to stop violations, get money back for victims, and recover costs and fees, and federal courts in the state can hear those cases. Courts can also order the agency to stop and may impose fines for intentional or repeat violations. These rules do not cancel state laws unless they conflict, and they do not limit who states or federal courts can allow to practice law.