Judge Rules Part of New Bankruptcy Law Unconstitutional

Across the country you can hear the cry: “Go bankruptcy lawyers! It’s your birthday!” And they’re going to party just like it is their birthday.

According to a story running on Dallas News.com, a federal judge in Dallas has ruled that a provision of last year’s new, improved, and lemon-scented bankruptcy laws is actually unconstitutional, and inhibits the attorneys’ right to free speech.

The ruling was by U.S. District Judge David C. Godbey. It marks a victory for bankruptcy lawyers who criticized the Bankruptcy Abuse Prevention and Consumer Protection Act as a pro-credit-card industry initiative that makes it harder for debt-burdened consumers to get a second chance.

“Without addressing all the complexities of bankruptcy law, it seems quite possible that sometimes taking on more debt could be the most financially prudent option for someone considering bankruptcy,” Judge Godbey said in his ruling. However, current bankruptcy laws — or, at least, the laws before Godbey got ahold of them — prohibit attorneys from such counseling.

Of course, a ruling like this is sure to rake in the appeals, so it’s like Godbey’s ruling won’t have much effect until all the appeals are resolved.