U.S. Code » Title 11 » Chapter CHAPTER 5— CREDITORS, THE DEBTOR, AND THE ESTATE › Subchapter SUBCHAPTER II— DEBTOR’S DUTIES AND BENEFITS

11 U.S.C. § 526

Restrictions on debt relief agencies

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(a) A debt relief agency shall not—(1) fail to perform any service that such agency informed an assisted person or prospective assisted person it would provide in connection with a case or proceeding under this title;(2) make any statement, or counsel or advise any assisted person or prospective assisted person to make a statement in a document filed in a case or proceeding under this title, that is untrue or misleading, or that upon the exercise of reasonable care, should have been known by such agency to be untrue or misleading;(3) misrepresent to any assisted person or prospective assisted person, directly or indirectly, affirmatively or by material omission, with respect to—(A) the services that such agency will provide to such person; or(B) the benefits and risks that may result if such person becomes a debtor in a case under this title; or(4) advise an assisted person or prospective assisted person to incur more debt in contemplation of such person filing a case under this title or to pay an attorney or bankruptcy petition preparer a fee or charge for services performed as part of preparing for or representing a debtor in a case under this title.(b) Any waiver by any assisted person of any protection or right provided under this section shall not be enforceable against the debtor by any Federal or State court or any other person, but may be enforced against a debt relief agency.(c)(1) Any contract for bankruptcy assistance between a debt relief agency and an assisted person that does not comply with the material requirements of this section, section 527, or section 528 shall be void and may not be enforced by any Federal or State court or by any other person, other than such assisted person.(2) Any debt relief agency shall be liable to an assisted person in the amount of any fees or charges in connection with providing bankruptcy assistance to such person that such debt relief agency has received, for actual damages, and for reasonable attorneys’ fees and costs if such agency is found, after notice and a hearing, to have—(A) intentionally or negligently failed to comply with any provision of this section, section 527, or section 528 with respect to a case or proceeding under this title for such assisted person;(B) provided bankruptcy assistance to an assisted person in a case or proceeding under this title that is dismissed or converted to a case under another chapter of this title because of such agency’s intentional or negligent failure to file any required document including those specified in section 521; or(C) intentionally or negligently disregarded the material requirements of this title or the Federal Rules of Bankruptcy Procedure applicable to such agency.(3) In addition to such other remedies as are provided under State law, whenever the chief law enforcement officer of a State, or an official or agency designated by a State, has reason to believe that any person has violated or is violating this section, the State—(A) may bring an action to enjoin such violation;(B) may bring an action on behalf of its residents to recover the actual damages of assisted persons arising from such violation, including any liability under paragraph (2); and(C) in the case of any successful action under subparagraph (A) or (B), shall be awarded the costs of the action and reasonable attorneys’ fees as determined by the court.(4) The district courts of the United States for districts located in the State shall have concurrent jurisdiction of any action under subparagraph (A) or (B) of paragraph (3).(5) Notwithstanding any other provision of Federal law and in addition to any other remedy provided under Federal or State law, if the court, on its own motion or on the motion of the United States trustee or the debtor, finds that a person intentionally violated this section, or engaged in a clear and consistent pattern or practice of violating this section, the court may—(A) enjoin the violation of such section; or(B) impose an appropriate civil penalty against such person.(d) No provision of this section, section 527, or section 528 shall—(1) annul, alter, affect, or exempt any person subject to such sections from complying with any law of any State except to the extent that such law is inconsistent with those sections, and then only to the extent of the inconsistency; or(2) be deemed to limit or curtail the authority or ability—(A) of a State or subdivision or instrumentality thereof, to determine and enforce qualifications for the practice of law under the laws of that State; or(B) of a Federal court to determine and enforce the qualifications for the practice of law before that court.(Added Pub. L. 109–8, title II, § 227(a), Apr. 20, 2005, 119 Stat. 67; amended Pub. L. 111–327, § 2(a)(20), Dec. 22, 2010, 124 Stat. 3560.)Editorial NotesReferences in Text

The Federal Rules of Bankruptcy Procedure, referred to in subsec. (c)(2)(C), are set out in the Appendix to this title.

Amendments

2010—Subsec. (a)(2). Pub. L. 111–327, § 2(a)(20)(A), substituted “that is untrue or” for “that is untrue and”.

Subsec. (a)(4). Pub. L. 111–327, § 2(a)(20)(B), inserted “a” after “preparer”.

Statutory Notes and Related SubsidiariesEffective Date

Section effective 180 days after Apr. 20, 2005, and not applicable with respect to cases commenced under this title before such effective date, except as otherwise provided, see section 1501 of Pub. L. 109–8, set out as an Effective Date of 2005 Amendment note under section 101 of this title.

Notes of Decisions
Cited in 191 cases (68 in the last 5 years), 1939–2026 · leading case: In re Hanawahine, 577 B.R. 573 (Bankr. D. Haw. 2017).
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In re Hanawahine, 577 B.R. 573 (Bankr. D. Haw. 2017). · cites it 14× “§ 329 AND TO SANCTION ATTORNEYS FOR VIOLATIONS OF 11 U.S.C. § 526 Robert J. Faris, United States Bankruptcy Judge The United States Trustee’s Motion To Compel Disgorgement Of Fees Under 11 U.”
Hersh v. United States Ex Rel. Mukasey, 553 F.3d 743 (5th Cir. 2008). · cites it 14× “GARWOOD, Circuit Judge: Defendant-appellant-cross-appellee, the United States, by and through Attorney General Michael Mukasey, appeals the decision of the United States District Court for the Northern District of Texas holding a recently enacted provision of the Bankruptcy…”
Milavetz, Gallop & Milavetz, P.A. v. United States, 541 F.3d 785 (8th Cir. 2008). · cites it 22× “See 11 U.S.C. § 526 ("Restrictions on debt relief agencies"); 11 U.”
Harrington v. Racki (In re Bishop), 578 B.R. 158 (Bankr. W.D.N.Y. 2017). · cites it 21× “The motion requested a variety of forms of relief, including disgorgement of attorney’s fees, cancellation of the retainer agreement, imposition of civil penalties under 11 U.S.C. § 526 (c)(5), and the issuance of an injunction prohibiting Mr.”
In re Foster, 586 B.R. 62 (Bankr. W.D. Wash. 2018). · cites it 13× “Bellum and UpRight Law violated, inter alia , 11 U.S.C. §§ 526 and 707(b)(4), Fed. R. Bankr.”
Connecticut Bar Ass'n v. United States, 620 F.3d 81 (2d Cir. 2010). · cites it 4× “First Amendment Challenge to § 526(a) (I) Title 11 U.S.C. § 526 (a)(4) prohibits a debt relief agency from advising an assisted person “to incur more debt in contemplation of [bankruptcy] or to pay an attorney or bankruptcy petition preparer fee or charge for services performed…”
Henderson v. Legal Helpers Debt Resolution, L.L.C. (In re Huffman), 486 B.R. 343 (Bankr. S.D. Miss. 2013). · cites it 13× “¶¶ 77-78), Count IV: 11 U.S.C. § 526 (Compl. ¶¶ 79-87), and Count V: Fraud (Compl.”
Zelotes v. Martini, 352 B.R. 17 (D. Conn. 2006). · cites it 12× “Specifically, Plaintiff challenges 11 U.S.C. § 526 (a)(4) as violative of the First Amendment.”
Hersh v. United States, 347 B.R. 19 (N.D. Tex. 2006). · cites it 9× “The provisions ' at issue are: 11 U.S.C. § 526 (a)(4), which prohibits attorneys from giving certain advice to their clients; 1 and 11 U.”
In Re Reyes, 361 B.R. 276 (Bankr. S.D. Florida 2007). · cites it 13× “Does 11 U.S.C. §§ 526 , 527 and 528 apply to an attorney who provides bankruptcy assistance to an assisted person but who receives no payment of money or other valuable consideration for the bankruptcy assistance? ii.”
Loyd P. Cadwell v. Kaufman, Englett & Lynd, PLLC, 886 F.3d 1153 (11th Cir. 2018). · cites it 6× “The provision specifically at issue here, 11 U.S.C. § 526 (a)(4), provides in relevant part that a "debt relief agency"-including a law firm that provides bankruptcy-related services-"shall not .”
Dignity Health v. Seare (In re Seare), 493 B.R. 158 (Bankr. D. Nev. 2013). · cites it 4× “See 11 U.S.C. § 526 (a)(3) (2012). The Debtors argue that DeLuea told them the St.”
Show all 191 citing cases →
— 11 U.S.C. § 526(a)(1) — 1 case
In re Hanawahine, 577 B.R. 573 (Bankr. D. Haw. 2017). “§ 329 AND TO SANCTION ATTORNEYS FOR VIOLATIONS OF 11 U.S.C. § 526 Robert J. Faris, United States Bankruptcy Judge The United States Trustee’s Motion To Compel Disgorgement Of Fees Under 11 U.”
— 11 U.S.C. § 526(a)(4) — 2 cases
Milavetz, Gallop & Milavetz, P.A. v. United States, 541 F.3d 785 (8th Cir. 2008). “See 11 U.S.C. § 526 ("Restrictions on debt relief agencies"); 11 U.”
Milavetz & Gallop v. United States (8th Cir. 2008).
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