Are these fees standard/normal?

[EmptyPocket]

I am beyond frustrated with how much filing a Chapter 13 has turned out to be and how much it is continually costing us each month. We were initially told by the attorney we retained that it would cost $3000 to hire him for our Chap 13. Then he later had us sign papers stating it was an hourly fee of $250/hr. for any work he did and $125/hr for any work that his paralegal did but that it was just a formality.....it would really still come out to be a total of $3000. We are now being billed $4789. In addition to that, he never told us until after we filed that the Trustee gets 10% of the amount we needed to have included in the plan so that was ANOTHER $3000!

Once every 3 months, the Trustee sends us a statement showing us the payments that he has received, where that money was applied, and what current balances are. He also send s copy to our attorney who then charges us $25 for receiving it. THEN, the attorney makes a photo copy of that letter, which we have already gotten from the Trustee, and charges us another $75 to do that!

I am just so sickened by all of this and would have just given our house back to the bank (the only thing we were behind in) if we knew it was going to be like this!

So....is this typical?

[HHM]

All you attorney is doing is taking money away from your unsecured creditors. So, what does it matter.

Those fees you mentioned are fairly standard.

I guess I don't understand why people think BK attorneys should work for free or somehow be cheaper than other types of lawyers.

[SMinGA]

Billing to send you a copy when its standard for the BK court to have already sent you a copy seems odd - but HHM is right. Your plan payment is your DMI - call it $X. $X is split among the atty fees, trustee fee, and unsecured creditors. If the atty gets more, unsecured get less but you pay the same.

Trustee taking out an admin fee is standard, though I imagine many attorneys don't discuss all the details of how a plan works.

[EmptyPocket]

I understand the Trustee needs ot get paid....I just wish my atty had TOLD us about it in the beginning as it would have been a factor in or deciding to go the route of Chapter 13 to save our home.

And, no, the atty. charging more doesn't just take away from our unsecured creditors. We have NO unsecured debt in our filing....JUST our mortgage. We paid him $3000 in cash as a retainer and now we have to pay another $1700+ and that keeps going up monthly.

I don't expect a BK atty. to work for less than others. Where did THAT come from? I just think it's taking advantage of a client to send them a copy of a letter that they KNOW they already got directly from the Trustee and then charge the client $75 for it!

[NoTomatoCan]

Simply ask your attorney (in writing if necessary) to no longer send you those statements. Easy as that.

I can't imagine that was part of your retainer agreement, and he can't require it just to generate additional billings.

[lrprn]

If you still want to keep your home, then take a close look at the retainer agreement that you signed when you decided to hire this lawyer. My guess is that what you are mentioning here is a part of that agreement.

Sounds like it's time to sit down and have a frank conversation with your attorney. It may be that there's a misunderstanding here that could be cleared up with a face-to-face discussion.

If this situation really is intolerable, then you can always choose to fire your current attorney and retain another to continue to your Ch 13. However, it can be challenging to find another bk attorney willing to take on a case filed by a colleague, and you'll pay the retainer fee again.

Bk is all about choices and living with those choices. I'm sorry to hear that so far your bk hasn't provided you with some relief from your stress If you are under your state's median income for your family size, you can always decide to surrender your home, convert to Ch 7, and walk away for a truly fresh start.

There are always choices to make in bk - the problem is the options to select from may not be the ones we want.

[HHM]

Now, attorneys are allowed to charge the chapter 13 plan for attorney fees beyond the original retainer paid. And to do so, they must submit a fee applications that must be approved by the judge. It is how they can make the case affordable to you. In reality, most chapter 13's, if properly billed would cost $8,000+, would you (could you) pay that up front. What I mean by billed properly is that most attorneys get lazy on billing every little thing (believe it our not) and will just do some minor tasks for free.

There is an attorney here in Colorado whose average charge is well over $10,000 per chapter 13, even on routine chapter 13's. But as you can imagine, the bulk of that is paid through the chapter 13.

However, I do not like it when attorneys do not adequately communicate this fact and it is preferably that an attorney not charge the plan if doing so will increase the debtors plan payment; but the trade off is, the amount needed up front will be higher.