Probably the most common question I get asked at parties when I tell people I’m a bankruptcy attorney is, “How do your clients pay you if they’re going to file for bankruptcy?” (The second question usually is, “Can I have one of your business cards?…For a friend, of course.”) It’s a good question, though. How do people pay their bankruptcy lawyers?
There are several ways.
Many people have some cash reserves which can be used to pay fees and costs.
Have someone else do it. Family, typically, and less often, friends will pay our fees and costs. I’ve even been paid by an ex-spouse of my client!
Take the money you’ve been paying creditors, particularly credit cards, stop paying the creditors, and pay your lawyer.
Borrow from your 401(k) or IRA, or take a loan against a whole life policy.
One client paid me from the proceeds of a yard sale (but be sure to document what you sold and for how much–the Trustee might want to know).
Some clients work out payment plans to pay the fee over a number of months.
In Chapter 13 cases, only a portion of the fee is paid up front, which makes it a bit easier for people to pay fees.
One thing you should probably not do–file yourself (what’s called pro se) without a lawyer.