Why do so many bk attorneys not want to do Ch. 13?

[ColoradoBell]

When calling attorneys in my area, I often heard that the attorney 'doesnt' do 13s". Then on this site, I saw a couple of posts that said 'make sure your attorney doesn't push you into a 13 when you could do a 7'

This got me wondering. I realize that a 13 takes a lot of time and that once you pay your retainer, the lawyer has to depend on your making those monthly payments into the plan to pay for his services whereas a 7 is over in a few months.

Is it the money?

[justbroke]

I think that Chapter 7s are "easier" money to earn for an attorney. They usually only involve ONE appearance and that's at the 341 Meeting. A Chapter 13, on the other hand, requires the same 341 Meeting appearance, but also at least 2 Court appearances in my District. (That's the preliminary confirmation hearing and the final confirmation hearing.) Chapter 13s require the attorney to also "think" and to draft a Plan of Reorganization.

May require additional motions to cramdown motor vehicles loans, or even motions to strip a lien on an underwater home. These too may require more hearings to be attended and certainly time to draft the motions. They also need to monitor claims and make appropriate objections to them as well. They also have to "monitor" the case for the duration of the Chapter 13 so they are attached to the case for years, not months! Lots of work. The Chapter 13 attorney also charges more.

And, I actually like it that the number of Chapter 13 practitioners is limited. I think it's a specialized part for Bankruptcy Attorneys and that it requires an attorney who has the patience to deal with it.

Most Chapter 13 attorneys that I know, get their fees up front and only the monitoring fees are in the Plan. There are some attorneys who will risk it and allow you to put a substantial portion of their fee in the Plan.

I think it's not simply the money but a combination of money and effort. A Chapter 7 is over in 4 months and a Chapter 13 is over in 36 to 60 months (or more). Other than the 341 Meeting, you can whip through Chapter 7s like there is no tomorrow.

[ColoradoBell]

That makes sense...thanks justbroke!
I'd heard this so many times "I don't do 13" that I started thinking that my name was on some black list somewhere and they were just saying that to get rid of me.
(Of course they really may have been trying to get rid of me!)

[HHM]

It's a time issue; Chapter 13's require substantially more time than a chapter 7 (easily 3-4 more times). Thus, from a business perspective, for the time involved in a chapter 13 case, an attorney can usually do 4-6 chapter 7. Also, given how stingy courts are on approving attorneys fees, it is hard for the attorney to get paid the equivalent of 4-6 chapter 7 in a single chapter 13. Also, as justbroke pointed out, there is a learning curve that requires a substantial amount of upfront time that cannot be compensated so the attorney simply makes a choice to keep it simple. (at least, that is my theory).

[Brazzy]

13s are A LOT more work and most Ch13's do not make it all the way through. On top of that most 13's put atty fees into the plan so they are paid over time. Atty's would rather grab a handful of cash, file the ch7 petition and move on to the next client. Far less work, far less time, and if they push for volume its far more money in that short span of time.

[MSbklawyer]

And, I actually like it that the number of Chapter 13 practitioners is limited. I think it's a specialized part for Bankruptcy Attorneys and that it requires an attorney who has the patience to deal with it.

Most Chapter 13 attorneys that I know, get their fees up front and only the monitoring fees are in the Plan. There are some attorneys who will risk it and allow you to put a substantial portion of their fee in the Plan.

I can pretty accurately gauge how likely the chances for a successful plan completion. I base how much of the fee I require up front on a couple of things:

1) How long the debtor has been steadily employed

2) The reason(s) for filing 13 in the first place. Whether the reason for filing 13 is to save a house, the income is too high, or because they've too recently filed for chapter 7.

If the debtor has been steadily employed for a couple of years or more and is filing a 13 because he's behind on his mortgage due to an illness or some such circumstances, I'm comfortable filing them with very little of the fee up front. For them to let the plan fail means that they are likely to lose their house and most people will climb a tree to keep that from happening.

On the other hand, sporadic employment, or a recent chapter 7 means a less than fantastic chance of plan completion.

Last year -- I swear I'm not exaggerating -- my phone rang at 4:45 on December 23. The guy's house was going to be foreclosed on December 28 and he was nearly a year behind on his mortgage payments. He had recently filed a pro se 13 that had been dismissed because he had joined not only his wife, but his mother-in-law and an adult child in the petition with him as debtors. All 4 of them as debtors in one chapter 13. He had also filed a motion to pay the filing fee in installments and had failed to make any payments under that arrangement. So I insisted upon (and even more amazingly got) the full fee up front.

[justbroke]

MSbklawyer... I'd probably instantly want the fee up front from any pro se debtor who had their prior case dismissed.

[espo1357]

they are running a business, and could care less.
that has been my experience.

not to say that all lawyers stink, but most are not very concerned about their clients, but only their bottom line.

Smarter business would be to look after your clients and serve them, and then those references will drum up more business long term.