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BK attny fees (when paid up-front)

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  • BK attny fees (when paid up-front)

    The general question is -- what does a BK filer get in return when paying a BK attny? What can a BK filer retaining a BK attny expect in return ? a confirmation? a discharge?

    Variation - What can a BK filer expect in return for paying a BK attny w/ the up front fees? What prevents a bait and switch - like this scenario? WHat stops a BK attny from saying that 'given the info you provided me, and assuming no other assets / income are found, you will have a Ch13 payment of X dollars a month for Y mos .', but the amt ends up being much more than this , even enough to make a confirmation impossible due to lack of DMI? Did this BK filer just throw away $2,000 up front fees? Can these be returned?

    Is there typically a written contract ?

    we are in cook cty state=IL

  • #2
    If you need a new roof on your house, you would pay the contractor part of his fee up front. What's to stop him from running off with your money and not doing any work or doing a lousy job? The answer is much the same for attorneys.

    There is usually a fee agreement. If you aren't given a written fee agreement, ask for one. It should specify what is included in the fee.

    Attorneys will not guaranty results. Nobody can guaranty a discharge, especially in a Chap 13. Too much can happen during the 3 to 5 year plan. An attorney also will not be able to tell for sure what your initial plan payment will be with any accuracy until they have reviewed all the details of your case. They will not do that until you pay the retainer. Even after they determine what your plan payment should be and file a plan that includes that payment, they can't guaranty the plan will be approved as submitted. They can never know for sure what the trustee might object to. But, if you provide complete and accurate information, there is no reason the plan payment shouldn't be in the ballpark. Part of the job is yours to make sure you review your petition before you file it, understand how your plan payment is calculated and speak up if you see a problem.

    In exchange for attorney fees, you get an expert in bankruptcy who knows federal and local laws and procedures, including many unwritten local customs. You save yourself hours and hours of research and filling out unfamiliar forms and significantly reduce the risk of serious errors that can jeopardize your entire case. You get a professional whose job it is to advocate for you and be on your side. If you are paying a $2,000 retainer, the rest of the fee is probably going to be paid within the plan. The attorney wants your plan confirmed and for you to complete your plan so he can get paid the rest of his fee. Most of the attorney's work is done before the petition is filed. Also, if an attorney does a lousy job, he risks his reputation and a complaint to the State Bar. Attorneys rely on their reputations and if nothing else inspires them to do good work, the need to maintain their reputations will. Also, I suspect that most attorneys who represent individual debtors in bankruptcy choose that practice because they want to help people. There are more lucrative areas of law they could choose and get rates in excess of $500 per hour. BK attorney rates seem to be about half that.

    If you don't have enough DMI to fund a Chap 13, then you can file a Chap 7. If you are not willing to do that because of your non exempt assets, you need to be prepared for the possible consequences. The fee is not likely to be refundable. But, everything is negotiable. You can ask an attorney in advance whether they will agree to refund a certain amount of the fee if they calculate your plan payment and you decide not to file BK at all. But, keep in mind that by the time they know what plan payment they will propose, they have already done the bulk of the work that that $2,000 retainer covers.
    LadyInTheRed is in the black!
    Filed Chap 13 April 2010. Discharged May 2015.
    $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

    Comment


    • #3
      As LITR says you should have a signed contract or agreement between you and your attorney that spells out what that fee paid for and will pay for, from petition preparation to discharge. That agreement should also spell out what are the fees for services not covered by the initial or basic attorney fee. The agreement should also state his/her hourly rate for anything for requiring unanticipated work. I paid up front, in installments .

      Your petition should also state what your attorney fee covers and the fees for "above and beyond" services.

      Attorneys will prepare, file, represent and negotiate for you. You are paying for their knowledge of the BK code, case law, local rules and judge/trustee/UST/creditor tendencies and behaviors. You are paying for, to borrow a movie line, their unique set of skills acquired over a hopefully long or busy career. They can't guarantee results because anything can happen, there are many variables and players in the process that can affect post-petition outcomes.

      Comment


      • #4
        thank you for both replies. Is having a written contract/agreement spelling out what is or is not included typically done or do I as a debtor have to demand this? Might I be perceived as a pain in the a$$ for doing requesting this?

        The person I am likely going w/ is one of the few I consulted w/ who suggested trying for a 7 and then convert to a 13 if ...... ["if needed"; dont know the details here].. I assume that the upfront fees for a ch7 wd be thru discharge, but if we go to the ch13 route after ..[unpsecified turbulence].... the fees wd increase to the standard $4k in our state of IL . But would include what services throughout the committment period ?

        I 'd assume that anything having to do w/ my ch13 during the committment period wd be included . I cd not ask him to help out w/ a property dispute w/ a neighbor eg. But if I get a job , get more income, and the ch13 trustee makes a motion to amend my plan, I assume that this wd be standard support and certainly not above and beyond -- CORRECT? Obviously, i wont let this be an assumption but get it in writing at the start - CORRECT?

        Again, what is standard from everyone's experience? Does a conventional level and kind of support vary by state and perhaps even by district w/in state?

        On reputation, curiously the one I am considering had a nasty review posted online - by which review anyone w/ a brain wd have passed on this attny, i bet. But guess what , I must not have a brain 'cause I read his rebuttal and it seemed reasonable. But my spouse asked , after reading it, wd nt it be part of the generally accepted level of service for a bk attny to communicate whether a confirmation is likely or not likely? Part of the reviewer's vitriol was the claim that he did not know or expect a confirmation wd not be coming ( or alternatively, he was led to believe by the attny that a confirmation was likely). It seemed to be an error of ommission, somethng that the attny did NOT do......

        here is some of the review.....When%I%sawxxxxxxxxxxxxI was under&the/5impre$$ion^a*bkrlwyr^could help me&giveme%some#####tim0e

        part of the rebuttal was

        'We\5%filed%%%%hapter13 bnkrptcy***forthisclient. It didntsucceed, asmany casesdo not....'

        my spouse assumed that this s/b amonng the things that a bk attny s/ provide to the filer/retainee of said attny - the odds of confirmation ( I assume that 'succeed' means here didn't get confirmed; cd also be was confirmed but failed after confirmation due to something the filer did or did not do.

        To me, confirmation, or more precisely, a good faith estimate - AND COMMUNICATION - of the odds of confirmation is the sine qua non of service for a bk attny. Obviousy in a c13 during the course of the comm period if the file misses a payment that is all on the filer. Otherwise it is like a seeing person leading a blind person ( the filer ) down a dangeous dark alley towards a pit bull.

        so

        Attorneys will not guaranty results
        --agreed... but a ch13 s/ communicate solid estimates of outcomes, or at least specify the exact conditions or risks or unknowns tht lurk in the alleyway.
        Last edited by rayrod; 09-29-2017, 12:00 PM.

        Comment


        • #5
          Originally posted by rayrod View Post
          thank you for both replies. Is having a written contract/agreement spelling out what is or is not included typically done or do I as a debtor have to demand this? Might I be perceived as a pain in the a$$ for doing requesting this? A fee agreement is typical and often required by law. In California, a fee agreement is required if fees are expected to exceed $1,000. State law will vary. How detailed the agreement is depends on the attorney. If an attorney thinks you are a pain in the ass for asking for a written agreement, even if not required, that is a good sign you should find another attorney. Don't expect that all agreements will say what is not covered, but it is reasonable to expect it to include what is covered. If you want more detail in the fee agreement, ask. The worse that will happen is the attorney will say no. Keep in mind that the firm may have a standard fee agreement that attorneys are not allowed to alter without approval by firm management, which can be a pain and cause delay.

          The person I am likely going w/ is one of the few I consulted w/ who suggested trying for a 7 and then convert to a 13 if ...... ["if needed"; dont know the details here].. I assume that the upfront fees for a ch7 wd be thru discharge, but if we go to the ch13 route after ..[unpsecified turbulence].... the fees wd increase to the standard $4k in our state of IL . But would include what services throughout the comittment period ? If your local court rule sets the "no-look fee" (the fee the attorney can charge without court approval), the rules often also set forth exactly what is covered and your fee agreement will probably reflect that. For example, here is the standing order in the Central District of Illinois about Chapter 13 fees. http://www.ilcb.uscourts.gov/sites/i...ins%202016.pdf.

          I 'd assume that anything having to do w/ my ch13 during the committment period wd be included . I cd not ask him to help out w/ a property dispute w/ a neighbor eg. But if I get a job , get more income, and the ch13 trustee makes a motion to amend my plan, I assume that this wd be standard support and certainly not above and beyond -- CORRECT? Obviously, i wont let this be an assumption but get it in writing at the start - CORRECT? What exactly is included seems a bit vague in the above order, but I think it would depend on how much work had to be done to get you confirmed. If the attorney charges the no look fee, but has to spend a lot of time getting your plan confirmed, he may be inspired to get court approval to charge more for later work. He also may decide it is not worth the trouble to ask for court approval.

          Again, what is standard from everyone's experience? My own experience is that my plan was easily confirmed, my 2nd mortgage easily stripped and my attorney didn't have to do anything between confirmation and my last payment other than respond "congratulations, keep making your plan payment," every time I emailed him to tell him I got a raise or bonus. I provided him such complete information in the beginning that he told me before even preparing my petition that I had done most of his work for him. He probably made enough of a profit form the "no look fee" I paid to help make up for other clients where he lost his shirt. Does a conventional level and kind of support vary by state and perhaps even by district w/in state? Yes, and by attorney as well.

          On reputation, curiously the one I am considering had a nasty review posted online - by which review anyone w/ a brain wd have passed on this attny, i bet. But guess what , I must not have a brain 'cause I read his rebuttal and it seemed reasonable. But my spouse asked , after reading it, wd nt it be part of the generally accepted level of service for a bk attny to communicate whether a confirmation is likely or not likely? Part of the reviewer's vitriol was the claim that he did not know or expect a confirmation wd not be coming ( or alternatively, he was led to believe by the attny that a confirmation was likely). It seemed to be an error of ommission, somethng that the attny did NOT do......

          here is some of the review.....When%I%sawxxxxxxxxxxxxI was under&the/5impre$$ion^a*bkrlwyr^could help me&giveme%some#####tim0e

          part of the rebuttal was

          'We\5%filed%%%%hapter13 bnkrptcy***forthisclient. It didntsucceed, asmany casesdo not....'

          my spouse assumed that this s/b amonng the things that a bk attny s/ provide to the filer/retainee of said attny - the odds of confirmation ( I assume that 'succeed' means here didn't get confirmed; cd also be was confirmed but failed after confirmation due to something the filer did or did not do.

          To me, confirmation, or more precisely, a good faith estimate - AND COMMUNICATION - of the odds of confirmation is the sine qua non of service for a bk attny. Obviousy in a c13 during the course of the comm period if the file misses a payment that is all on the filer. Otherwise it is like a seeing person leading a blind person ( the filer ) down a dangeous dark alley towards a pit bull.

          so



          --agreed... but a ch13 s/ communicate solid estimates of outcomes, or at least specify the exact conditions or risks or unknowns tht lurk in the alleyway.
          I would not judge an attorney by one negative review. The attorney probably has plenty of happy clients that don't bother to write reviews. The unhappy clients are the ones most likely to complain. The fact that the attorney bothered to respond means that he cares about his reputation. Omissions are a tricky thing. Was there something the attorney should have foreseen or should have told the client about? Could the client have been more involved in his own case and asked questions to make sure he understood what was going on? Who knows. If an attorney had to tell a client absolutely everything that could possibly go wrong, fees would probably be a lot higher.

          The fact is that there are too many factors in confirmation. An attorney does not have a crystal ball and can only do his best to present a plan he believes is confirmable. The facts of each case are different and the attorney can't control what the trustee objects to. He also can't control what he doesn't know or what the client is willing to accept if the trustee insists the plan be modified. As you have experienced, different attorneys will have different opinions of how to treat a certain situation. It could be that they all would propose a plan that would get confirmed with little or no change.

          You seem to be looking for a sure thing. That is just not really possible. There is a point where you have to go with your gut and choose the attorney you are most comfortable with.


          LadyInTheRed is in the black!
          Filed Chap 13 April 2010. Discharged May 2015.
          $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

          Comment

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