fbpx

I think the key part of the entire recent United States Supreme Court Opinion in Milavetz v. United States, as far as any legible understanding of what debtor’s attorneys can and can not advise clients is in Footnote 6 of the opinion, which is found on page 18, the pertinent part is as follows:
“Thus, advice to refinance a mortgage or purchase a reliable car prior to filing because doing so will reduce the debtor’s interest rates or improve his ability to repay is not prohibited, as the promise of enhanced financial prospects, rather than the anticipated filing is the impelling cause. Advice to incur additional debt to buy groceries, pay medical bills, or make other purchases “reasonably necessary for the support or maintenance of the debtor or a dependent of the debtor,” … is similarly permissible.”
This should be called the “Wal-Mart”  footnote.  Basically, the Court is saying that there is no prohibition on an attorney advising a debtor to use their credit card to purchase groceries prior to filing bankruptcy, as long as they need them. 
Update 3.11.10: Lawyers Weekly article on the case
John Rogers – Kentucky Bankruptcy Attorney