Paying the lawyer to give advice to a creditor?

[987654]

We received the first laywer bill/statement in my boyfriend's Ch. 13. Apparently, his former insurance agent, who is a creditor for some $300, called my boyfriends lawyer when he got the notice...and the lawyer spent 20 min. talking to him about what he (the creditor) can do to object, HIS rights to object and appear at the meeting of creditors, etc.

So...OUR lawyer spent almost half an hour talking to our CREDITOR, giving him legal advice/explaining HIS rights, and we are supposed to pay for it? Am I the only one who thinks that is BS? IMHO the lawyer should have said "I represent X, you will need to contact your own lawyer for legal advice in this matter"...not spend $60 worth of our retainer telling the creditor how to work against us!

Sure enough, the creditor showed at the hearing, and spent 10 minutes trying to convince the Trustee that he should get some sort of preferential treatment and so on. The trustee told him that he would be treated the same as all unsecured creditors, but in the meantime that was another 10 minutes of lawyer time!

Grumble...as soon as the plan is approved we'll send a polite yet firm letter to the lawyer disputing that, but it really chaps my behind. I had to vent...

[SinkingFast]

I don't blame you one bit. You are right. You're attny shoulda told the insurance agent to seek his own legal counsel. I wouldn't wanna pay for that time either. Excuse me!! Doesn't the retainer mean your attny represents you and your legal interests??

[FilingOnMyOwn]

Thats the biggest ripoff I've ever heard. Attorneys file flat rate charges for filing bk's, not hourly. If this attorney honestly expects you to pay him for giving legal advice to others, than you need to report him.

[SinkingFast]

I am not the only one here running into the hourly thing. Others are too.

We've been given contracts by every attny, except 1, that states what they will and will not do for the BK fee. Beyond that, if problems arise, etc., they will be glad to help us at their hourly rate. I'm sure that will come with some sort of doc to sign saying we contracted them for their help at $X/hour. So we can pay them the flat fee for handling the BK work, but we may also owe them extra by the hour for other things that come up.

[SinkingFast]

Ok,........... I think I may have figured out the hourly rate thing.

At the Home website for our BK district, I clicked on an Electronic Updates link. Next page was a links to "news" type statements to attnys from the Court.

One of those I read said the fees allowable had been updated from $2500 max to $2900 max for filing BK's.

When we first called around, offices told us the attnys charged anywhere between $1000 and $2500 to handle a BK. That would be the old max fee. In order for attnys to be sure their "BK Fee" is under the allowable, they are now contracting for certain services they will and will not provide for the BK Fee. That leaves them open to charge extra for other things.

One of the "other situations" I've seen at every law office in the papers they have you read and sign before the Consult,....... If an unsecured creditor wants you to reaffirm your debt with them, you "may" want advise on how to handle that. The attny will be glad to assist you in making your decision and processing any necessary legal paperwork for an additional fee. This is the way the attnys are getting around the flat fee max.

Filers go in thinking they'll pay the $1K, $1500, whatever was quoted. Problems/situations arise that are not included in the initial contract and are billed at hourly rate. In the end the filer winds up paying more than the fee quoted at the start to the attny for his/her/their BK.

[987654]

Good, I'm not overreacting. The hourly is against the retainer...since it is chapter 13, we paid a $1200 retainer which included the filing fee, and then he'll get $20 per month during the plan...if he uses less time than the retainer/monthly fees, then we get a refund, if he uses more, then we end up owing him, etc...he estimated that it would be $2000, which is covered under the plan payments. So far it is about $875 which included the filing fee, the paperwork, in office meetings, etc. From here there isn't much to do, so we should come in even with the $2000 estimate, we hope. It could be worse, and we really like the lawyer...he's been great!

But $60 for the "teleconference between [insurance agent] with questions on treatment, claim, ability to question at 341 Meeting and other issues"?? It was 30 minutes, not 20 as I originally thought.... I can not imagine WHAT would have taken half an hour in the first place...our initial meeting that explained *everything* only took 60 minutes!

We'll politely contest that charge and see what he has to say...perhaps he'll simply remove it, or come up with some justification as to why we should be responsible.

Onto good news: I checked Pacer yesterday and my Chapter 7 has been DISCHARGED~~~WOOOHOOOOOOOO!!!! The final objection date was 1/13, and I figured it would be a month considering how busy the courts are, so I was really happy to see I am officially done

[Jman30]

Congratulations on the Chapter 7 discharge!!!!!

I would most DEFINITELY contest that fee. There is NO WAY your lawyer should have been giving advice to a creditor. The creditor could easily figure out their rights in a BK by contacting their legal counsel or just looking on the internet. Heck, on the Notification of Bankruptcy that creditors recieve, it literally lists all their rights on the paperwork!!!
I am sure he will just try to justify it by saying he was not giving "advice" but simply telling the creditor what their rights are. But that is STILL bogus - the creditor can figure out their rights on their own time and dollar, not yours!!!

[bkfiler]

who knows that the hell he was thinking when he did that.

but, remember two things. its only $60. and you are going to need his help along the way.

however, i would tell him that you dont expect to see him speaking to any of your creditors in length again. paying a $60 charge to a creditor that you only owe $300 to is absurd.

plan your complaints wisley. in fact, i might not say anything unless it happens again. then it is a true problem imo.

[987654]

BK filer~thanks, anything would be worded professionally, politely, and non-confrontational. No bridge burning by any means~like I said we've been quite happy with this attorney and certainly won't go nuts over a $60 charge. It's also entirely possible that the attorney noted the conversation in the file, and the paralegal assumed it was a 'billable', rather than just a polite conversation...who knows.

[SinkingFast]

BK filer~thanks, anything would be worded professionally, politely, and non-confrontational. No bridge burning by any means~like I said we've been quite happy with this attorney and certainly won't go nuts over a $60 charge. It's also entirely possible that the attorney noted the conversation in the file, and the paralegal assumed it was a 'billable', rather than just a polite conversation...who knows.

That's quite possible. Happened with us once. Attny made a note in our file by accident when he was actually talking on the phone about someone else's case. Had several files on his desk at once, and noted he'd "spoke with client regarding" whatever, and the note got placed in our file. When we got the bill, I knew we hadn't chatted on the phone as I was traveling that day. Long ago, before cell phones. So I asked nicely about it. They looked at the notes and the attny realized from his note he'd been discussing another client's case. They removed the charge.