Follow-up For filing now or later( where the metal...

[buriedindebt]

[B]"The price of bankruptcy will go through the roof,said Brian Kimber, a West Palm Beach bankruptcy attorney. "The average consumer won't be able to do it."

Craig Kelly, another bankruptcy attorney in West Palm Beach, estimates that the cost of filing for Chapter 7 with a boutique bankruptcy firm could range as high as between $2,000 and $2,500.

Currently, it's typical for a Chapter 7 filing to cost about $1,000 in attorney's fees, and a base of $2,500 for a Chapter 13 filing, according to Sam Gerdano, executive director of the American Bankruptcy Institute. A Chapter 13 filing is more expensive because it's more labor-intensive than a Chapter 7.

http://money.cnn.com/2005/04/20/pf/bankruptcy_fees/index.htm

[HHM]

That's about right. Nearly 2/3 of the attorney's in my area are leaving the practice of bankruptcy completely, some have decided they will not file a chapter 7 on be half of a client but will still do chapter 13. The remaining firms, the firms who only do bankruptcy really have no choice but to continue, and their chapter 7 fees are easily doubling. As far as attorney's go, its going to become a lot smaller group of attorneys who will be representing debtors and it will be the high volume firms that remain. Most attorneys who do less than 10-20 filings a month, will probably stop practicing in bankruptcy and focus on other areas.

There are some work arounds that need to be played out, I have heard that some attorney's may employ a shadow forms prep operation and then appear in the bankruptcy after the case has been filed to get around having to sign the petition, but I think the US Trustee will probably try to put a stop to that.

But in general, it will be more costly and time consuming for attorneys to represent debtors in a chapter 7.

[hhou812hh]

That's about right. Nearly 2/3 of the attorney's in my area are leaving the practice of bankruptcy completely, some have decided they will not file a chapter 7 on be half of a client but will still do chapter 13. The remaining firms, the firms who only do bankruptcy really have no choice but to continue, and their chapter 7 fees are easily doubling. As far as attorney's go, its going to become a lot smaller group of attorneys who will be representing debtors and it will be the high volume firms that remain. Most attorneys who do less than 10-20 filings a month, will probably stop practicing in bankruptcy and focus on other areas.

There are some work arounds that need to be played out, I have heard that some attorney's may employ a shadow forms prep operation and then appear in the bankruptcy after the case has been filed to get around having to sign the petition, but I think the US Trustee will probably try to put a stop to that.

But in general, it will be more costly and time consuming for attorneys to represent debtors in a chapter 7.

HHM, will some of the legal fees still be paid to the atty in the plan as it is now? Is that why there won't be many ch7 attys left besides the means test?

[HHM]

HHM, will some of the legal fees still be paid to the atty in the plan as it is now? Is that why there won't be many ch7 attys left besides the means test?

Yes, that is still my understanding. The bulk of attorney's fees can still be paid as an administrative expense in a chapter 13. The undecided issue is how much the courts will allow under the new law. It used to be that an attorney would have to file a fee application everytime they filed a chapter 13 and have their fees approved by the court each time. However, since so many 13's are done, the court and trustees adopted standard fee guidelines for a 13 which can be charged by debtor attorneys without having to get approval from the bankruptcy court and trustee.

With the new law going into effect, those standard fees will probably be out the window and each attorney will probably have to file a fee application until such time as the trustee and courts determine a standard reasonable fee that can be charged in a chapter 13 under the new law.