Affordable Bankruptcy Legal Fees| Chapter 7 Legal Fees| Chapter 13 Legal Fees

BANKRUPTCY LEGAL FEES

BANKRUPTCY EXPENSES | CHAPTER 7 BANKRUPTCY LEGAL FEES | CHAPTER 13 BANKRUPTCY LEGAL FEES

BEFORE CONSULTING WITH A BANKRUPTCY ATTORNEY:

  1. IS ATTORNEY LICENSED TO PRACTICE AND IN GOOD STANDING WITH THE BAR THE STATE BAR OF CALIFORNIA (Red Flag: previous complaints, examinations, or license suspensions)
  2. WHAT ARE ATTORNEY’S CLIENT REVIEWS:Better Business Bureau, Google, Yelp, Avvo, Nolo, (Red Flag: complaints)
  3. IS ATTORNEY MEMBER OF BANKRUPTCY ASSOCIATIONS National Association of Consumer Bankruptcy Attorneys, San Diego Bankruptcy Forum/California Bankruptcy Forum (Red Flag: lack of membership in these associations suggests that perhaps this attorney is not very active in the practice of bankruptcy, typically attorneys join groups specific to their area of practice to obtain discounted continuing education requirements, updates on legal precedents, mingle with other attorneys in the area of practice to share knowledge and experience)
  4. WHAT IS BREATH OF ATTORNEY’S EXPERIENCE IN FILING BANKRUPTCY CASES WITH THE COURT: PACER (Red flag: either little or no cases have been filed or there is a pattern of filed cases ending in dismissals)

HIRING THE RIGHT BANKRUPTCY ATTORNEY: THINGS TO CONSIDER WHEN MEETING WITH ATTORNEY

DON’T BE INTIMATED: You should feel comfortable with anyone handling something as important as your legal and financial affairs. You should have good chemistry with your bankruptcy attorney. We all have a certain character and style, find one that fits with your own. How to find a Good Bankruptcy Attorney: Consumer Resources by National Association of Consumer Bankruptcy Attorneys Look for “someone who listens to you”. Before hiring an Attorney, ask questions and read thoroughly the attorney client agreement. It is not unreasonable to negotiate the fees, ask how many cases the attorney has filed to determine the breath of their experience.

ACCURATE & THOROUGH PETITION PREPARATION: Will your petition be prepared by clerical staff or outsourced to third party preparer? Such services are offered to attorneys for $200-$300 ($60 if done overseas-not recommended!). A prepared petition is e-mailed to the attorney. Quality of that work depends on the preparer and the attorney’s efforts in reviewing the work. If the attorney lacks the time or does not consider it important to prepare the petition by him/herself will they dedicate sufficient time to review the documents that will be filed with the Court? At TLC case preparations are done by your attorney who is familiar with your case to ensure attention to detail.

PROPER AND ADEQUATE CLIENT COUNSELING: How much time will your attorney offer you? Will you be dealing mostly with secretaries or clerks who aren’t qualified nor licensed to offer legal advice? Are the legal fees going toward attention from an experienced attorney who understands not just bankruptcy laws and local court’s rules and procedures but how these specifically apply to your case? It can be extremely frustrating to deal with an attorney who is inaccessible, fails to return calls & e-mails in a reasonable time. Particularly in Bankruptcy, clients can experience a lot of anxiousness and stress. Frequent communications with your attorney should alleviate these feelings and make the process as stress free as possible. At TLC you are assured frequent, direct, and prompt contact with your attorney.

TRUSTEE MEETING ATTENDANCE: San Diego’s Local Jurisdiction Bankruptcy rules state that if an appearance attorney is to attend the Trustees Meeting, that attorney must PERSONALLY meet with the debtor(s) AT LEAST ONCE (SPECIFICALLY NOT AT THE TRUSTEE OFFICE JUST PRIOR TO THE MEETING) and be thoroughly knowledgeable about the case. The attorney you meet with, should understand your case so that any questions or concerns are addressed promptly. Clients should have received adequate counseling so that they know what to expect and attend all hearing(s) with confidence. At TLC, your attorney is familiar with all aspects of your case, will attend all hearings with you, and provide you counseling for this important meeting.

CHEAP FEES AND EXTRA CHARGES: Will the cheap up front legal fees mean you will be charged extra for asking too many questions, rescheduling appointments, keeping your file open while you gather required documents and legal fees, or negotiating reaffirmation agreements to keep your vehicles? Check the attorney/client agreement. Any extra charges must be clearly spelled out in the attorney/client contract. At TLC attorney/client agreement makes every effort to provide reasonable and affordable fees based on anticipated scope of the work involved, extra items are clearly spelled out and explained in reviewing the attorney/client agreement.

TRICKY “$99 STARTS YOUR CASE” or “Cases filed as low as $699” OFFERS: Understandably paying fees is difficult. The “$99 to start your case” advertisement gets people in the door and hopes to keep them there.   What does “start your case” mean?  For $99 the office will open a file and maybe mail out legal representation letters to your creditors. Starting your case as far as filing bankruptcy case goes means the preparation and filing of the bankruptcy petition.  Starting an office file DOES NOT mean the firm will FILE your case with the Court. Court filing fees alone exceed $99. Until the case is filed, you are not protected.  What does as low as $899 mean?  It does not mean your particular case will be quoted a $899 fee. It is a tactic to get people in the door and again hopefully keep them there when the actual fee quoted is much higher than the “as low as” advertised price.

SURPRISING INFORMATION ABOUT ATTORNEY FEE PAYMENT PLANS: Because, in Chapter 7, unpaid legal fees are a pre-petition unsecured debt, any unpaid legal fees must be listed in your bankruptcy petition Schedule F as an unsecured debt. Unsecured debt is DISCHARGED in your Chapter 7 case and unpaid attorney fees are no exception to the discharge. So, if you haven’t paid your bankruptcy attorney before he/she filed the case, attorney is not supposed to collect any money from you after the case is filed. Any attempts by your attorney to collect unpaid attorney fees is a violation of Bankruptcy Laws. Payment Plans arrangements are okay but legal fees must be paid IN FULL before attorney files the case.  In some jurisdictions, outside of Southern California, it may be possible to arrange financing of legal fee, however our San Diego Bankruptcy Court does not allow the work to be partitioned into pre and post filing segments.  Therefore, at least for now, it is not possible in San Diego to finance the legal fee.  TLC accepts payment arrangements that suit clients’ needs. Discuss your circumstances with the attorney for a payment arrangement.

BANKRUPTCY EXPENSES AMOUNT PAID TO
Bankruptcy Credit Report $33 SINGLE/$53 JOINT CinLegal
Credit Counseling Course $14.95 Counseling Agency
Court Filing Fee CHAPTER 7: $335 CHAPTER 13: $310 Court fee MAY be split into 2 payments. Fee Waiver is possible in some situations
Financial Management Course $9.95 Counseling Agency

* List of All US Trustee Approved Financial Counseling Providers, Other Court Fee Schedule (may or may not be applicable)

BEFORE HIRING A BANKRUPTCY ATTORNEY THE ATTORNEY BY LAW MUST PROVIDE YOU:

  1. ATTORNEY/CLIENT AGREEMENT: with both A) Legal Fees and B) Scope of Representation CLEARLY spelled out and
  2. BANKRUPTCY DISCLOSURES legally required by Bankruptcy Rules
ATTORNEY FEES IN CHAPTER 7:

CONSIDERATIONS OTHER THAN CHEAP BANKRUPTCY LEGAL FEES: Some cash strapped clients look for cheapest lawyer in town. But “cheap” fees can also mean counsel is inexperienced, overwhelmed handling too many cases, outsourcing parts of the work and relying on unlicensed unqualified staff to handle important client matters and communications.

LEGAL FEES AMOUNT applicable to
DISCOUNTED $1,200 UNEMPLOYED, DISABLED, SOCIAL SECURITY RECIPIENT, uncomplicated cases
AVERAGE $1,500-1,600 TYPICAL CASE WITHOUT significant NUMBER OF CREDITORS, income at or below median, no real estate ASSETS
PREMIUM 1,700-$2,800 SIGNIFICANT ASSETS, REAL ESTATE PROPERTIES, 20+ CREDITORS, INCOME EXCEEDING CALIFORNIA MEDIAN, MORE THAN 1 CHECKING, SAVINGS, INVESTMENT ACCOUNTS, PENDING LAWSUITS, BUSINESS OWNERS

TLC RESERVES THE RIGHT TO QUOTE FEES AFTER A FULL REVIEW OF A POTENTIAL CASE TO DETERMINE ELIGIBILITY UNDER DIFFERENT BANKRUPTCY CHAPTERS AND THE COMPLEXITY OF THE CASE.

Factors in Determining Attorney Fees

  • How many creditors do you have? more than 15 is significant
  • Does your income significantly exceed California Median requiring a CAREFUL Means Test Analysis?
  • Do you own many assets OR properties SECURED WITH loans?
  • Do you owe income taxes?
  • Are you in foreclosure?
  • Are you self-employed or HAVE MULTIPLE SOURCES OF INCOME TO EXAMINE, CALCULATE, AND DOCUMENT?
  • Are your financial documents organized
  • Are you able to utilize technology to communicate with your attorney and provide documents (pull online bank statements send PDF files or email or fax documents as needed)?
  • Are there legal or factual issues in your case that create challenges?
  • Do you need your attorney to keep your file open & communicate with you and your creditors for several months while you organize your paperwork and find the means to pay legal fees to move forward?

INCLUDED IN CHAPTER 7 LEGAL FEES

  • Review of Documents. Consultation and Advice (often most critical and time consuming)
  • Expeditious Petition Preparation
  • Review, Execution, and Filing of Petition Documents with the Southern District of California Court
  • Communications with you on Status of your case
  • Timely submitting required documentation to the Trustee
  • Negotiating/Executing reaffirmation agreement on auto loans Attendance
  • Representation at the Creditor’s Meeting
  • Filing of Post Filing Documents as needed
  • Attendance post filing Court Hearings (reaffirmation agreements, confirmation meetings)
  • Promptly Communicating with you on Status and Progress of Your Case Ensuring the Case closes after discharge
CHAPTER 13 LEGAL FEES

Legal Fees: $4,350. Lien Strip motion or stipulation to Lien Strip, if applicable, $625 plus expenses such as: Title Search (if needed), Service of Notice on Creditors, County Clerk’s Filing fees.

Unlike Chapter 7, in Chapter 13 attorney fees can be paid in full up-front or partially paid up-front with remaining fees to be paid paid through the Chapter 13 Payment Plan. TLC typically accepts $1,650 up front and collects rest of fee after the plan is confirmed. Keep in mind, that attorney will receive no further compensation until the Plan is confirmed, which depending on your case can take a couple of months or longer.

Beware of Attorneys demanding Chapter 13 legal fees be paid up front: If attorney insists on all Chapter 13 legal fees to be paid up front, it could mean they have little or NO confidence in a successful case confirmation otherwise they could wait to be paid out of the plan funds? More importantly, filing a case destined to fail can be have negative consequences besides a loss of time and money.

INCLUDED IN CHAPTER 13 LEGAL FEES

  • Review of Documents.
  • Consultation and Advice: often the most critical and time consuming because success of any Chapter 13 depends on proper planning, budgeting, and a debtor’s commitment & ability to stick with a budget
  • Expeditious Petition Preparation including a Chapter 13 Payment Plan
  • Review, Execution, and Filing of Petition Documents with the Southern District of California Court
  • Pro-Active and Frequent Communications with you on Case Status
  • Timely submission of documentation to the Trustee, as required by Local Rules Attendance & Representation at a Creditor’s Meeting (including any continued meetings)
  • Filing of Lien Strip Motion, attending hearing if needed, filing of Lien Strip order
  • Filing of Post Filing Documents as needed
  • Attendance post filing Court Hearings (confirmation hearings, lien strip motion hearings)
  • Promptly Communicating with you on Status and Progress of Your Case
  • Prompt Filing of Confirmation Order
  • Attorney responsibilities in the case continue while the case remains open (Please read: Rights and Responsibilities of Chapter 13 Debtor describing parameters for “initial $4,350 fees & additional services that may be required but are not included in the initial fees)
  • Ensuring the Case closes after discharge.
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