Attorney's Fees Proper?

[one2betru]

Hello, just heard about this forum. I'm going through a Chapter 13 case and paid for a $3000 retainer. The plan payment also includes $150 a month for attorneys fees, which as explained to me would be for the cost of updating the court with copies of my payments. Is this fee correct or did I misunderstand?

The reason I ask is because if that is the case then a 3 year bankruptcy would mean I pay the attorney $8400 and that's if everything goes smoothly, does that makes sense?

[PyroGuy]

An atty. that I am meeting with next week (from and excellent referral) has a retainer of $500....and total fees of about $2K.....

If it's not too late, you might want to shop around and interview other atty's.

[momofthree]

It sounds like maybe you're including trustee fees in that $150/mo figure. The attorney doesn't deal with your payments and disbursements, that is the trustee's job, and yes, he charges a fee for it (5-10% of each payment).

However, if that is all the attorney's fee, then I'd find a different attorney pronto. That's outrageously expensive!

[HHM]

It sounds like maybe you're including trustee fees in that $150/mo figure. The attorney doesn't deal with your payments and disbursements, that is the trustee's job, and yes, he charges a fee for it (5-10% of each payment).

However, if that is all the attorney's fee, then I'd find a different attorney pronto. That's outrageously expensive!

We are really in NO POSITION to make the determination.

For chapter 13's, nearly all districts have a standard fee the court will allow an attorney to charge without having to submit a detailed fee application. If the attorney exceeds that amount, then the judge reviews the fee application. Note, that $150 per month is taken from your unsecured creditors, all it means is less money goes to them, the $150 per month should not affect your overall payment.

Frankly, I see nothing wrong with what you were quoted.

[justbroke]

I see nothing really wrong either. While it really has no bearing on your District, my District allows $100/month in "monitoring" fees over the term of the Chapter 13. This would be $6K in a 5 year plan alone, just on monitoring.

Sorry, but as HHM writes, fees are usually "routine and customary" and they are defined by your local District. An attorney that overcharges would get his fee disgorged. This is why fees are highly visible and fee applications need to be made to the Court. The "monitoring" fee and other fees included "in the plan" are there for everyone, including the Trustee, to complain about. Trust me, the Trustee would be complaining if the attorney is taking food out of the unsecured creditors' mouths.

[car67]

Well depends on how complex your case is and most 13s are complicated. My fees were over $9000 to date and could go higher but its all built into the plan and its worth every penny a good attorney charges to give you sanity and a new lease on life. Just my take!

[frustrated51]

depends

I'm not sure our total amount, but our retainer was $500 and the rest is in monthly fees. I think it depends exactly what they have to do and not all 13's are going to be the same.

[mikemc411]

I just visited the trustee / district website for my area... Under the "Local Rules" standard attorney fee's were clearly listed, it even had a list of what services were covered under the standard fee and what services an attorney could charge extra for...

It also had a not-so-nice section dealing with income tax returns!! - clearly stated that ALL returns go to the trustee.... (from reading on hear it sounds like this varies from district to district)

[LadyInTheRed]

It also had a not-so-nice section dealing with income tax returns!! - clearly stated that ALL returns go to the trustee.... (from reading on hear it sounds like this varies from district to district)

All returns or all refunds? There's a big difference, so read carefully. Just because they require a copy of all of your tax returns, does not necessarily mean they require you turn over all refunds to the Trustee.

[SMinGA]

Out of curiosity I looked up the atty fee policy on my trustee's website. Fees (13) under $2501 do not need to be disclosed. There is no specific maximum, but there is a policy against charging unethically high fees. I gather this district uses a common sense approach, since 'one size fits all' does not work with ch. 13. But that the trustee/judge ultimately has the final say if the fee schedule is questionable.

[BKMike1]

All returns or all refunds? There's a big difference, so read carefully. Just because they require a copy of all of your tax returns, does not necessarily mean they require you turn over all refunds to the Trustee.

Western KY - Trustee gets returns AND refunds....copied from local rules on website

e) Delivery of Tax Returns and Tax Refunds in Confirmed Chapter 13 Cases
All debtors having plans confirmed that provide for less than full payment to holders of unsecured claims shall by May 15 of each year:
(1) submit to the standing trustee copies of federal and state income tax returns filed during the pendency of the case;
(2) deliver federal and state income tax refunds to the standing trustee for distribution to creditors; and
(3) annually submit a current income and expense statement to the standing trustee who will determine whether all disposable income is being paid into the plan.
(4) If an extension of time for filing income tax returns is filed in lieu of a tax return:
(A) a copy of the extension request shall be filed with the standing trustee no later than May 15 of each year a case is pending; and
(B) a copy of the returns shall be filed with the standing trustee when filed with the taxing authorities.

[newbie2]

(3) annually submit a current income and expense statement to the standing trustee who will determine whether all disposable income is being paid into the plan.

Whoa. That's the first time I've seen that. What a pain in the tush for those who have to do this!

[LadyInTheRed]

Western KY - Trustee gets returns AND refunds....copied from local rules on website

e) Delivery of Tax Returns and Tax Refunds in Confirmed Chapter 13 Cases
All debtors having plans confirmed that provide for less than full payment to holders of unsecured claims shall by May 15 of each year:
(1) submit to the standing trustee copies of federal and state income tax returns filed during the pendency of the case;
(2) deliver federal and state income tax refunds to the standing trustee for distribution to creditors; and
(3) annually submit a current income and expense statement to the standing trustee who will determine whether all disposable income is being paid into the plan.
(4) If an extension of time for filing income tax returns is filed in lieu of a tax return:
(A) a copy of the extension request shall be filed with the standing trustee no later than May 15 of each year a case is pending; and
(B) a copy of the returns shall be filed with the standing trustee when filed with the taxing authorities.

But, is mikemc411 from Western KY? I wasn't doubting that a trustee in a particular district might require copies of tax returns AND all refunds.
mikemc411 said that in his district "all returns go to the trustee". He said nothing about refunds. As HHM pointed out in a recent sticky, people often confuse the two terms eventhough they mean different things. I wanted to be sure mikemc411 wasn't misinterpreting a requirement that all debtors send tax returns to a trustee to mean that all debtors must turn over their refunds to the trustee.

[one2betru]

Thank you for all the helpful information. I am located in southern California. It's nice to know it would be taken from unsecure creditors and not my discretionary income, in that case it really doesn't matter and I've heard good things about my attorney. Just was wondering what the extra cost is for, someone said "monitoring fees" and from what I understand the attorney would have send a copy of my house payment to the trustee and the creditors each month. Could that be part of the administration/monitoring fees? I know, I know I should ask the law office, but wanted to get some outside input too =b

[forgotten]

For the record, Eastern Kentucky does not take any tax refunds and does not want a copy of your returns. They are way cooler than western KY.