Attorney Fees for Chapter 13

[spearmint]

Is it true that your attorney fees for filing chapter 13 can be paid over the term of the BK? That means, I assume, there is no out-of-pocket fee other than the court/filing fee which I think is around $300.

[optimistic1]

Each attorney will have his own preference for this matter.

The filing fee is $274.

The fees for my attorney are $1500 down, and the remainder $2500, is rolled into the plan.

Most attorneys will charge you around $3500 to $4000

There will be out of pocket expenses other than the filing fee, the attorney will want you to pay something down.

[HHM]

Yes and no.

Although you "can" pay your attorneys fee over the course of the plan, quite frankly, any attorney worth anything would not be stupid enough to roll the "entire" fee into the plan. After all, the bulk of the work is performed before the case is ever filed, so you, as the debtor, should pay, up front, for the work to be performed.

The most common practice is to get roughly half the fee upfront and roll the balance into the plan.

I am actually of the opinion that attorneys that allow a debtor to roll a portion of the fees into the plan are doing a disservice to the debtor because they are creating potential conflicts of interest if you are unable to complete the plan.

[IBroke]

I am actually of the opinion that attorneys that allow a debtor to roll a portion of the fees into the plan are doing a disservice to the debtor because they are creating potential conflicts of interest is you are unable to complete the plan.

Guess that depends on the individual case. You have to keep in mind that paying several grands right away is often NOT an option for an individual filing for BK. I needn't point out that these individuals already ARE experiencing financial difficulties.

Why should an individual file for BK in the first place if he has thousands of dollars cash available? We DON'T have $4,000 cash right now...

I understand your POV, but in reality, it's not practical. Just like saying "don't file BK, it'll ruin your credit - you better pay off your debt right now.."

[HHM]

Guess that depends on the individual case. You have to keep in mind that paying several grands right away is often NOT an option for an individual filing for BK. I needn't point out that these individuals already ARE experiencing financial difficulties.

Why should an individual file for BK in the first place if he has thousands of dollars cash available? We DON'T have $4,000 cash right now...

I understand your POV, but in reality, it's not practical. Just like saying "don't file BK, it'll ruin your credit - you better pay off your debt right now.."

At the same time, that is sort of the point, if you can't "come up" with the $3-4K to pay for a chapter 13, then you are not likely able to make the necessary sacrifices to have an successful chapter 13.

[IBroke]

At the same time, that is sort of the point, if you can't "come up" with the $3-4K to pay for a chapter 13, then you are likely able to make the necessary sacrifices to have an successful chapter 13.

That's why you probably end up somewhere in the middle.
In addition, I wouldn't feel too comfortable in paying ANYBODY for 3 years in advance. We are all human, and as soon as somebody collected all his money, he might tend to let things go.

BTW, how many months in advance do you get paid?

[optimistic1]

Guess that depends on the individual case. You have to keep in mind that paying several grands right away is often NOT an option for an individual filing for BK. I needn't point out that these individuals already ARE experiencing financial difficulties.

Why should an individual file for BK in the first place if he has thousands of dollars cash available? We DON'T have $4,000 cash right now...

I understand your POV, but in reality, it's not practical. Just like saying "don't file BK, it'll ruin your credit - you better pay off your debt right now.."

I respectfully disagree, from my personal experience, I was once paying about $800 a month to credit cards. I stopped paying, and thus, I now have $800 extra each month to dedicate towards paying some attorney fees. I have paid 2 months worth at $500/month, and the rest to live the way I was meant to, like actually buying enough food to fill the fridge, fix the car, go to the doctor, buy some new clothes, etc. etc.

So, you need to have some discipline about the whole thing. I doubt that there is any attorney out there that will just let you pay them nothing, except the filing fee.

Your plan needs to have enough money to pay the remaining attorney fees as well, so you might have to pay it in full depending upon your financial circumstances.

However,

I do understand that everyones personal situation may differ from mine, so in that respect I can see what you are saying.

[IBroke]

I respectfully disagree, from my personal experience, I was once paying about $800 a month to credit cards. I stopped paying, and thus, I now have $800 extra each month to dedicate towards paying some attorney fees. I have paid 2 months worth at $500/month, and the rest to live the way I was meant to, like actually buying enough food to fill the fridge, fix the car, go to the doctor, buy some new clothes, etc. etc.

So, you need to have some discipline about the whole thing. I doubt that there is any attorney out there that will just let you pay them nothing, except the filing fee.

Your plan needs to have enough money to pay the remaining attorney fees as well, so you might have to pay it in full depending upon your financial circumstances.

And my personal situation differs from yours.

Just to make one thing clear - I didn't say the attorney shouldn't get - let's say - a $1,500 deposit. However, I did say I don't see a reason why he should get the entire $4,000 before he even lifted a finger. $1,500 already is quite an amount if your income is below the median and your car and mortgage already cost $2,800.

I'm currently paying $0.00/month on unsecured debt. I don't have the option of dropping a CC.

Would you call it responsible to default on your mortgage just to pay your attoney fee 100% in advance? I don't. I also need my car to get to work. If I don't pay my car ($300/month), it'll be gone.

And paying the balance of $2,500 in 36 installments is MUCH easier for me than putting that money on the table within a couple of weeks.

I'm on food-stamps right now, have a second job (cleaning houses) and do what I can. Talking about "some discipline", by all due respect, is inappropriate. $4,000 in one payment IS SIMPLY NOT AN OPTION for me, and I'm sure many people feel the same. And BTW, I haven't been using a single CC over the last 3 years. I didn't even visit a doctor either. Thank God!

[optimistic1]

IBroke,

Noting, your clear, bold font, statement. I am not attacking you, so don't take it the wrong way. If you are at the point where you are so ridiculously broke you cant even pay a dime for attorney fees, then maybe a Ch.13 just is not for you, maybe adjusting your lifestyle and giving up your house or secured assets and going for a Chapter 7 is a much better route.

And, like I said, everyone's situation is different (as yours so clearly is), so in some peoples cases, discipline is exactly the prescription, and in others, a second job is. So, I do agree that paying the whole fee in full is preposterous. I called one attorney, and that's what she told me, she wants the whole fee in full, I just about laughed her right off the phone. I have seen the down payment as low as $1000. That is reasonable. No one is asking you to come up with that kind of cash in a couple of weeks, unless you already have judgments filed and have current or pending garnishments. So what I mean by discipline is, set aside $100-200 a month, until you have the down payment for the attorney, and then pay it. You are going to have to pay them something to spend time looking at your case, and getting everything straight, and filling out your petition, etc. etc.


Done posting, this thread has gone off topic.

Spearmint, expect to pay fees ($1000-$2000) up front to the attorney, you will NOT find one that just does stuff for free.

[IBroke]

Well, like I said, everyone's situation is different, so in some peoples cases, discipline is exactly the prescription, and in others, a second job is. So, I do agree that paying the whole fee in full is preposterous. I called one attorney, and thats what she told me, she wants the whole fee in full, I just about laughed her right off the phone. I have seen the down payment as low as $1000. That is reasonable. No one is asking you to come up with that kind of cash in a couple of weeks, unless you already have judgements filed and have current or pending garnishments. So what I mean by discipline is, set aside $100-200 a month, until you have the down payment for the attorney, and then pay it. You are going to have to pay them something to spend time looking at your case, and getting everything straight, and filling out your petition, etc. etc.

I agree on that. I expect to pay between $1,000 and $1,500 in advance to start the process. No doubt about that. I, just as you, simply don't think it's either practical, realistic or reasonable to pay the entire fee in advance. That's all I wanted to point out.

Your example of $100-200/month is a good one because it clearly shows what I mean. That can be done. If you roll the remaining $2,500 into your plan, your monthly payment will be even less.

I'm sure the majority of individuals facing BK would have a problem paying that much in one payment. In 36 or 60 installments, however, it is manageable.

[IBroke]

IBroke,
Noting, your clear, bold font, statement. I am not attacking you, so don't take it the wrong way. If you are at the point where you are so ridiculously broke you cant even pay a dime for attorney fees, then maybe a Ch.13 just is not for you, maybe adjusting your lifestyle and giving up your house or secured assets and going for a Chapter 7 is a much better route.

No, I don't take it the wrong way. Again, where did I say the attorney shouldn't be paid a downpayment? I don't see where I made that statement.

Now do you know what it would cost to move out of a huge house and relocate? Moving equipment, storage, deposit for new rental etc.? $5K and up! And just because I would be downgrading, do you think somebody would pay that? Should I pay that in installments? It just shows that you aren't able to look at an individuals' situation from a different POV than your own. You just said: If you can't afford $4K, than pay 5K and up to relocate. And there aren't any pension funds or secured assets either.

It's truely amazing how many people are out there who believe that filing BK is just something you do because your either too lazy to work or you can avoid by NOT taking the goodies in life..Hello? We are in a recession.

And, like I said, everyone's situation is different (as yours so clearly is),

I only put it in bold becuase your first comment - before it was edited, clearly missed that conclusion. You pointed out that you would "strongly disagree" - based on YOUR situation..