Common Mistakes Associated With Bankruptcy Attorney Fees

Bankruptcy attorney fees differ when filing for bankruptcy. Different fees will be charged by lawyers for the two types of insolvency i.e. chapter 7 and chapter 13. Moreover, if the debtor can somehow prove financial hardship then the bankruptcy attorney fees can be completely waived off. The most common mistake that many people make when dealing with an attorney is that they simply accept any level of fees that the attorney quote for them in order to secure their services. Many will not ask questions or request the attorney to justify the fee. The efficiency of the attorney in dealing with your case should be questioned and should be in line with the insolvency attorney fees being demanded.

Clients who have filed for insolvency and are looking for a good attorney who will represent them in the best way possible will also make the big mistake of paying the bankruptcy attorney fees using their credit card. This is because they assume that the credit card debt has been wiped out. If the transaction is successful, the creditor might claim that the debtor had the money all along and was even able to meet the bankruptcy attorney fees. He might claim that the debtor filed for insolvency so as to avoid paying the debt and this might impact negatively on your case. The best thing that you can do is to agree on some sort of payment plan with the lawyer so as to avoid such problems.

You should disclose every last detail including all of your assets and financial state to your attorney. There are people who file for insolvency so that they can avoid foreclosures, repossessions, and wage garnishes. Hiding the assets that you would wish to retain from your lawyer will only lead to the eventual loss of these pieces of property. Your attorney will be in a better position to advise you about the situation and give you all the solutions that will help you make a favorable decision if you give him/her more information. Attorney fees will probably incorporate this fact.

The bankruptcy attorney fees should be one of the top priorities of the debtor and he/she should realize that if he/she is able to pay or disburse his debts adequately then the bankruptcy attorney fees will not be difficult for you to manage. You will be able to pay the fee within no time and ultimately be able to service your debts as per the agreement between the debtor and creditors.

Experienced attorneys will normally give the client time to sort out his finances before pressuring him on bankruptcy attorney fees. The less experienced attorneys will want to receive a small deposit of their fees before commencing the job. The major portion of the bankruptcy attorney fees should be retained to pay to the attorney once the job has been done. Any attorney who states otherwise is most often not a very experienced attorney and might not be able to adequately represent you when it comes to your case. Bankruptcy attorney fees can be managed very well if both parties can agree.

The issue of bankruptcy attorney fees is quite sensitive especially if insolvency has left the client in financial ruins. A clear way forward in terms of attorney payment should be agreed upon. The bankruptcy attorney fees might be quite high and it is need to manage it effectively. Most attorneys will want a written guarantee that you will be able to pay them for representing you. If you are unable to pay the insolvency fees, then it is important to discuss it with the attorney so that you can both reach an agreement which is favorable to everyone.

Stand-In Attorneys Don’t Hold Water in Some Courts

Today with the increased bankruptcy filings throughout the Nation, attorneys are changing the way the run their practices. The model that is being developed does not sit well with many including the courts.

When a client comes in and meets with an attorney and then signs a representation agreement, that may be the last time, the file or that attorney even touches the file. Clients need to be sure to question the attorney to be sure that the attorney is doing more than meeting and turning over the file to an associate or paralegal. It is also key to ask whether that attorney will appear with you in Court matters, e.g. Meeting of Creditors.

The Courts have noted that they do not approve of this “model” of attorneys office practices.

In a recent opinion by Judge Jeff Bohn (Consumer Bankruptcy News – Volume 23, Issue 19) he stated:

“The use of appearance attorneys deprives clients… Such a practice is insulting to the client, the Court, and the principles upon which the judicial system is built. Attorneys are not fungible. Attorneys are not all equal to each other, either in their courtroom abilities, their understanding of the law, or in their communicative skills.”

Clients choose a firm and an attorney for a reason, and clients have a right to be represented by the attorney of their choice during all portions of their case.

The justification for certain consumer bankruptcy attorneys that their business model will not work unless they are allowed to use appearance attorneys HOLDS NO WATER with this Court. If a firm’s business model conflicts with the professional standards of the legal profession, the former must give way to the latter.”

Be sure to ask when you interview or have your first meeting with an attorney, who will be handling my case?

  • An assistant,
  • Another attorney,
  • Appearance attorney???

When an attorney takes a case, they should initially meet with the client to understand and become familiar with the client’s needs. After that time, a Representation Agreement is agreed upon and signed.

As for Bankruptcies, there are many important deadlines and criteria to meet to finalize what type of bankruptcy is right for the client. During this time, a learning period begins for the attorney where he/she becomes very familiar with the case and interacts closely with the clients.

As the information and data are collected from the client, the attorney is able to fully understand not only the client but also the details of the case. Most of the time, there is a great deal of interaction between the client and the attorney. Much is learned about the client’s financial situation, spending habits, debts, how the debts occurred and the household income, etc.

At the 341(a) Meeting of Creditor’s is scheduled, the attorney presents his client to the Trustee and is there to assist and explain the petition that was put together for the client.

If an attorney who worked on the case does not come to Meeting of Creditors but sends an alternate attorney, how can that alternate attorney/stand-in attorney provide the proper representation and support to that client?

I don’t recommend having someone stand-in for an attorney when dealing with bankruptcy cases. Do you?

Cost of Filing Bankruptcy Using Attorney – Why Debtors Can Better Afford Bankruptcy Without Attorney

Bankruptcy: costs of filing bankruptcy with attorney, versus cost of filing using Bankruptcy Petition Preparer.

Under the current U.S. Bankruptcy Code or law, the system provides essentially TWO basic categories of outside assistance that a debtor filing for bankruptcy may use – assistance provided by an attorney, and assistance provided by a non-lawyer. And both of these parties come under what is called “Debt Relief Agents or Agencies.” Basically, the non-attorney assistance provider, who also goes by a name such as Bankruptcy Petition Preparer (BPP), preparers the documents upon which bankruptcy is filed with the Court for bankruptcy processing, while the attorney (or, more accurately, the help he hires that does such work) prepares the same set of documents, EXCEPT that the lawyer assistance-provider can supposedly give a debtor “legal advice,” and can appear, on the debtor’s behalf, in the administrative hearing on the bankruptcy case administered by the Court “Trustee” (who is not a Judge, but a court-appointed administrator) that will oversee the bankruptcy case.

Alright, How Do the Services and Fees Compare, Between the Bankruptcy Attorney and those of the Full Service bankruptcy petition preparer?

But what are the Costs of filing Bankruptcy using Bankruptcy attorney? Can debtors afford bankruptcy without lawyers? And, is there really any real, tangible, legitimate difference for the DEBTOR, both qualitatively and nominally, between the Full Service bankruptcy assistance that online-based non-attorney BPP agencies provide debtors, and that which is provided by online bankruptcy attorneys to debtors?

One view of it, popular in certain quarters among non-attorney online providers of bankruptcy filing assistance, is simply that there is “no difference,” or “little to none,” in terms of the actual or qualitative value of their work products for the debtor. The principal argument is that for each side, the actual, principal work that each side does or turns up for the debtor – the relatively simple but time-consuming, paperwork required to be prepared for the debtor’s use in filing for bankruptcy – is more or less basically the same content and quality for the non-lawyer prepared document, as it is for the lawyer prepared. In each case, the argument goes, the same set of documents are turned up by people who are seemingly experienced and trained or skilled in document preparation, and, in deed, in many real instances, are one and the same paralegals who work, or might have previously worked, for the bankruptcy lawyer’s office or the non-lawyer document preparer’s company. Or for both.

But, in any event, in the final analysis, the finished bankruptcy documents that both sides, the lawyer as well as the non-lawyer, provide the debtor, are generally the same and of the same quality. The Bankruptcy Courts generally accept them, process them, and act on them, just the same! In deed, it is a specific provision in the Bankruptcy Code that authorizes and sanctions that such persons may prepare such documents, and not just lawyers!

The Prices the non-attorney helper charges and what the attorney charges for Bankruptcy work

To a hard pressed and destitute debtor, the vexing, bothersome issue, is what justification, then, is there for the great disparity that exists in the prices the bankruptcy lawyers charge for bankruptcy work, relative to what the non-attorney bankruptcy document preparers charge for turning up essentially the same work for the debtor? Bankruptcy lawyers would, of course, advance all sorts of convoluted arguments and conceive all kinds of fancy justifications in defense of their extremely higher and disproportionate charges. That aspect, however, is a matter for another place and another day for us.

But is it a matter of no bankruptcy attorney, and cheap, low-low cost bankruptcy? For the benefit and information of debtors contemplating bankruptcy, just so you’ll at least have an idea, here are the differences in prices between what the non-lawyer assistance-provider charges, and what the attorney assistance-provider charges.

NON-ATTORNEY BANKRUPTCY HELPER’S SERVICES & PRICES

Service: In full Service bankruptcy work, the service of the non-lawyer debt relief agent or agency basically involves their staff gathering the various documents and required tons of papers and information together, and orderly arranging them and preparing all the legal forms and paperwork required by the debtor to file for bankruptcy with the bankruptcy court. For the better ones among them (they are not at all equal, some are far better than others, and quite a number of them are just about worthless!), these agencies use workers who are often highly trained and experienced paralegals (they average several years of work and/or training in the industry), and who are skilled at the preparation of legal documents and bankruptcy papers, and are often well versed and knowledgeable in bankruptcy filing law and procedures. With the Full Service bankruptcy petition preparers (at least those of them who are of the reputable and better categories), the debtor tends generally to get a better service and greater attention, and more one-on-one interaction for his or her case, along with the obvious far lower prices.

The Charges. There is usually a ONE-Time PAYMENT ONLY amount. One of such agency’s charge, for example, is $239 for a Chapter 7 bankruptcy; and $359 for Chapter 13. The price charged by these agencies tend strictly to follow an honest, upfront pricing that’s based ONLY on “per project,” rather than on “per hour.” (That’s in contrast to the attorneys’ charges, which are frequently based on “per hour” hourly rate).

This means that, once a reputable Bankruptcy Petition Preparer (BPP) takes any case from a debtor, you pay the BPP Agency, assuming it’s, say, a Chapter 7 case, just $239, and NOT a penny more on it, ever – no matter how many creditors you have (whether they’re 10 or 20, or 200), or you happen to start out with 10 creditors, but turn up 100 or 200 more later. Or, you have to file some additional papers to get some of your secured debts “affirmed” so you can keep, say, your car, etc. YOU JUST PAY THEM NOT ONE PENNY MORE. PERIOD! Thus, for most debtors, bankruptcy with no bankruptcy attorney assistance, offers the debtor low-low affordable costs and rates and is the only way to go.

The Time line. For the credible BPP, it takes an average of roughly one to two days to crank out the prepared, almost completed package of bankruptcy documents for, say, a Chapter 7 case filing (in a case, that is, where the debtor has hastened and substantially provides them the required financial information and documents necessary to do the papers). As a matter of policy, however, the BPP will hold off furnishing the papers to the debtor right away just so that the finishing touches, corrections and proper checking can be made before the debtor gets them. Bankruptcy, file with no bankruptcy attorney?

THE BANKRUPTCY ATTORNEYS’ SERVICES & PRICES

Service: What the bankruptcy lawyer (that is, the one who is competent and knowledgeable in bankruptcy, as not all attorneys are so equipped) does, is essentially akin to the Full Service bankruptcy type of work that the non-lawyer assistance-provider provides. Here, this involves the lawyer – or, more accurately, a staff of paralegals the he or she might have hired to actually do the work – gathering the various documents and required tons of documents and information together, and orderly arranging them, and preparing all the legal forms and paperwork required to file for the debtor’s bankruptcy with the bankruptcy court. As with the case of the non-attorney Full Service paper preparation providers, these workers who directly do the papers (the ones who are the persons that actually do the work in the lawyers’ the lawyers), are often highly trained and experienced paralegals (average several years of work and/or training in the industry) who are skilled at preparation of legal documents and bankruptcy papers, and often, well versed in bankruptcy filing law and procedures.

Furthermore, in terms of quality of service, with the lawyers, within the ranks of the lawyers who do bankruptcy work in the current times, those who file the bulk of the bankruptcy cases seem to be what one practicing bankruptcy lawyer, Jonathan Ginsburg, the Atlanta Georgia, calls “high volume filers.” These lawyers file 100 to 500 or more bankruptcy cases per month, using largely paralegals and some younger lawyers to do the paperwork, and for one thing, such high volume filers have a reputation for not offering much in the way of personal attention, but charge somewhat smaller fees relative to the “boutique” bankruptcy lawyers (those who file more limited number of cases) – a “smaller” amount of fees which Attorney Ginsburg admits, however, often still “appear to be too expensive” for some people “even [with] the lower fees and generous terms” that such volume filers think their charges represent.

Lawyers’ Charges: For Chapter 7, there’s the “initial” charge of $2,000 – 2,500; and for Chapter 13, the “initial” charge of $4,000 – $4,500. Unlike the BPP’s prices which strictly follow an honest, upfront pricing that’s based ONLY on one-time-only “per project” basis, the attorneys’ charges are frequently based on “per hour” hourly rate. (For example, the attorneys’ “per hour” hourly rate charge, was given as $228 (per hour) for their services in 2002, according to a respected independent research study, the 2002 Survey of Law Firm Economics, made by Altman Weil Pensa Publication).

Further more, as a rule, the lawyers’ fees for bankruptcy (the same, as well, in other issues) vary from lawyer to lawyer, and from one location to another location, even from a lawyer in one block to another lawyer just in the next block. The original charge (it’s usually referred to as the “initial” charge) you’re quoted by the lawyer, is often only for the run-of-the-mill, routine kind of case – the simplest, most ordinary kind of bankruptcy there is. So, if it turns out that you have, say, more creditors than the “average” (say, above 15 or so, depending on which lawyer or what part of the country), it will mean additional charge slapped onto your “initial” quoted charge. And, it can cost even more if it’s a “complicated” case in the lawyer’s opinion.

And further, God-forbid if there’s “litigation” or some creditor challenge to a debt, that means additional cost for you, a BIG one. If you are in a high-priced urban area, that alone will almost certainly guarantee more cost for you in filing for bankruptcy. Also, your lawyer will generally want his payment made IN FULL and upfront before he’ll represent you, especially if it’s a Chapter 7 case.

The Time line. Lawyers generally take an average of 2 to 3 weeks (if not more) to do the bankruptcy paper work for Chapter 7.

BOTTOM LINE:

In sum, for you as a debtor, what you should know is that bankruptcy lawyers’ generally make the allowance for themselves so they’d be able and in a position, after the “initial” fee shall have been paid them, to tack on additional fees beyond the “initial” fees you are quoted when you first signed on. The fee you are quoted by a lawyer in a bankruptcy case (even if you view it as excessive, already), may not be – and is often not – the final charge; you may still have to pay more. And probably will, generally!

Not so, though, with the non-lawyer bankruptcy assistance provider. Here, in contrast, that same very EXACT amount you’re quoted on day one, is the final and ONLY charge you’ll get, almost always, from them on the case – ever! PERIOD! The motto seems to be, no bankruptcy attorney & cheap, low-low cost bankruptcy!

Do you do your bankruptcy filing using the no attorney bankruptcy assistance, or the attorney?. What do you think?

FURTHER INFORMATION
For more on the details of the fundamental differences between the bankruptcy lawyer’s differential services, costs and benefits to the debtor, as compared to those provided the debtor by the non-lawyer helper’s services, or to find out how you or any others may use the services of one of the major non-attorney Debt Relief Agencies in the field of bankruptcy filing to file for your own bankruptcy, please visit this website: http://WWW.Afford-Bankruptcy.Com