How Can I Afford to Pay My Bankruptcy Attorney?

“How do you get paid?” is the question I’m asked most often at parties. After all, they say, if your clients don’t have any money, how can they pay you?

The answer depends on the details of a particular client’s case, but there are several ways I usually get paid.

1. You may have savings you haven’t used to pay bills, particularly if you contact me early enough in the process.

2. You can borrow money from your 401(k) or other retirement plan. I generally don’t recommend this, since you may end up owing taxes on the money you take out.

3. You can receive a gift from friends or family for some or all of the fees. (A pre-filing loan for fees is discharged by the successful completion of a bankruptcy. This doesn’t discharge the moral obligation, of course, and many clients will pay back those who helped them file even if there is no legal obligation to do so.)

4. Because I generally recommend that you stop paying credit cards, personal loans, and other general unsecured debt once you have decided to file, you may be able to use the money you save to pay me.

5. In a Chapter 13, you can use the money you would otherwise use for a mortgage payment to pay me, with the missed payment made up through your Chapter 13 Plan.

6. We can set up a payment plan.

I have also worked out other fee arrangements with clients. For several, I agreed to represent them for no up front money, receiving payment after I settled their personal injury lawsuits. If you refer a new client to me, I may reduce your fee. And some people, I do not charge at all (pro bono) or charge a greatly reduced fee (low bono). If you’re active duty military, I usually charge a reduced fee.

Talk with your attorney. You may be able to find ways to work things out in a way that benefits both of you.