(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, Subtitle C, §
227(a), April 20, 2005, 119 Stat. 67; Pub. L.
111-327, § 2(a)(20), Dec. 22, 2010, 124 Stat.
3560.)
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