Bankrate.com offers five tips to help debtors find affordable attorneys to help them file bankruptcy. The post quotes a range of fees, and then goes on to note that many attorneys offer payment plans, or that some or all of those fees may be paid through a Chapter 13 plan. I had the reaction I always do when quoting a fee to a client–I’m always afraid that if I start with the total, the prospective client will hear that number, stop listening, and never hear the part about how to pay it. Many people are so convinced that they can’t afford a bankruptcy lawyer that they never seek one out.
I recently sat in a courtroom listening to a hearing in a Chapter 13 case. The debtor did not have an attorney, and the trustee had a laundry list of problems with her case. The debtor testified about how much she paid a “foreclosure specialist” to try to save her house from foreclosure, and how when that didn’t work, he sent her to a CPA who gave her a set of bankruptcy forms to fill out and file for herself. Two things were obvious to me. First, between the “foreclosure specialist” and the CPA, she had paid more than I would have charged up front for a Chapter 13 filing–and it was a good bit more. Second, from her testimony it was obvious that both the CPA and the foreclosure specialist had given her legal advice–and neither is a lawyer. So, she overpaid in the first place, and got lousy advice. (Imagine going to a fancy restaurant, paying for filet mignon, and the waiter brings you a Big Mac–on moldy bread.) And, she never sought the advice of an attorney.
Most bankruptcy attorneys will offer the option of paying fees in installments, and in many cases an attorney can advise the prospective client how to restructure debt payments in anticipation of bankruptcy in order to free up enough money to pay the fees. Perhaps the best “tip” is to look for a bankruptcy lawyer who offers a free or low cost initial consultation, and get the attorney’s advice. An experienced bankruptcy attorney is not only familiar with the difficulty of paying fees when you are already under a financial strain, but will be able to suggest ways of accomplishing that payment as well. Many courts are also concerned with this issue, and are taking steps to ensure that competent bankruptcy attorneys are fairly paid. A good lawyer will make your case run more smoothly for you, the trustee and the court. In the district where I practice, the court recently issued an order which deals with the way Chapter 13 trustees disburse funds to attorneys. The court’s stated goal was to enable experienced bankruptcy attorneys to take cases with less money up front, and so ensure that counsel is available for those that need to file. I am aware of courts in at least three other districts issuing similar orders. You won’t know what’s available in your area until you consult an attorney. Don’t assume that you won’t be able to pay.
There is no doubt that bankruptcy is expensive. But, without competent representation, it may be even more expensive than you ever dreamed.
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Last modified: June 30, 2007