In terms of bankruptcy, a debt relief agency is any person or company you pay to help you with your bankruptcy. The two main types of debt relief agencies are bankruptcy attorneys and bankruptcy petition preparers. Credit counseling and debt settlement services are not debt relief agencies under the Bankruptcy Code
Debt relief agencies must provide you with a contract/retainer agreement and certain disclosures when you pay for their services.
Contract/Retainer Agreement must include:
- Listing the services that will be performed (these services should be performed as promised)
- Listing the charges for the services (petition preparers can only charge a limited amount based on district and attorney's fees must be reasonable)
- Must specify the terms of the payment for services
- You will provide your bankruptcy information in a manner that is complete, accurate and truthful
- You will completely and accurately disclose your assets and liabilities in your bankruptcy petition
- You must research the replacement value (garage sale value) of any asset you list in you bankruptcy petition
- You must accurately provide your current monthly income for Chapter 7 Means Test or your current disposable income for a Chapter 13 case
- You must acknowledge that your bankruptcy petition could be audited and if you do not cooperate, your petition may be dismissed
- You must be provided with basic bankruptcy information and other debt relief options
- You cannot take on more debt to pay for debt relief agency services
If a debt relief agency fails to provide a contract or make these disclosures, they can be subject to fines and penalties.
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