Trustee hearing to give us back $1000 !!

[tammygirl1]

We live in N. California so I knew lawyer fees could be higher than some others. We are having a lien strip done within the payments. Our lawyer required 3275 retainer and remaining of 5924 in our plan which we paid. During our 341 the trustee told our lawyer that he would need to submit reasons for higher than usual fees since our District allows for 2000 retainer with a total of 4800 (with lean strips). Anything over would be scroutinized. Well today, I see on pacer that the trustee submitted a hearing for motion to review fees and went on the explain that lien strips, wage garnishments, and submitting names for Childsupport are usual actions that don't justify such high fees and that they are suggesting that our lawyer return $1000 dollars back to the debtors. The trustee also mentioned this was not a business chapter and not priority as the lawyer suggested. The hearing is set for Dec 7th.
Question...does the lawyer usually wait and go to hearing or just refund the money as trustee asks? I was really surprised to see this today. We could definately use the money since we recently had to use reserves for dental expenses that werent expected!

[CoBelle]

Wow...great news! Hope your attonrey just complies, but some of course go to the hearing and give the judge a song and dance re how much work they did. Let us know what haps!

[despritfreya]

So, between your up front fee and the amount paid by the Trustee, you paid a total of $9,199.00 to the attny. After deducting the 13 filing fee, the attny received $8,925.00. This supposedly covered the basic 13 plus a lien strip. Now the Trustee wants the attny to disgorge $1,000.00 reducing his fees to $7,925.00.

I would love know his hourly rate and see the billing records for your case. I have no clue what a typical hourly rate is in your State. The no-look flat rate is about the same as where I am. Using my hourly rate (and not attributing any time to a paralegal who may do most of the work and bill at a much lower rate), his fees equate to spending a total of 25 hours on the case. That is a lot of time.

I hope he responds to the Trustee so that you can see exactly where your $$ went.

Des.

[tammygirl1]

So, between your up front fee and the amount paid by the Trustee, you paid a total of $9,199.00 to the attny. After deducting the 13 filing fee, the attny received $8,925.00. This supposedly covered the basic 13 plus a lien strip. Now the Trustee wants the attny to disgorge $1,000.00 reducing his fees to $7,925.00.

I would love know his hourly rate and see the billing records for your case. I have no clue what a typical hourly rate is in your State. The no-look flat rate is about the same as where I am. Using my hourly rate (and not attributing any time to a paralegal who may do most of the work and bill at a much lower rate), his fees equate to spending a total of 25 hours on the case. That is a lot of time.

I hope he responds to the Trustee so that you can see exactly where your $$ went.

Des.

Desprit, it is a total of 5924...sorry I wasn't clear. We paid 3275 retainer and will be paying the remaining of 5924 in the plan. But I am curious to see how our lawyer responds to the trustee also.

[walkthaplank]

When I was waiting for my 341 there were a couple of people who had the trustee chastise the attorney for higher than standard fees. In each of those cases the trustee told the attorney to submit the overcharge to the trustee so it could be used to pay unsecured creditors... I hope you actually get the money back!

[despritfreya]

Desprit, it is a total of 5924...sorry I wasn't clear. We paid 3275 retainer and will be paying the remaining of 5924 in the plan. But I am curious to see how our lawyer responds to the trustee also.

Okay. That makes a bit more sense. So, after deducting the filing fee, the total fees charged are $5,650.00. While it is above your district's no look amount, if the attny can justify the charges based on a reasonable hourly rate he could fight the Trustee. However, fighting is going to cost, in time, more than the $1,000 asked for. However, depending on how the attny looks at it, not fighting could open the doors for future losses in other cases.

Using my billing as a guide (we do not do flat rates - all work is on an hourly basis), if there was no litigation involved (the adversary on the strip down was done and the lender did not "answer", for example) then, the amount charged is slightly high, maybe by $500 to $700. I'll bet, if the attny doesn't just fold, a settlement will be reached somewhere around $500. Keep us posted. I am very interested.

Des.

[car67]

The fees sound high and if the attorney values getting his cases past the trustee he should refund the $1000 to the plan. The trustee will take the $1000 and pay the other creditors I doubt you will actually get a refund since its money allready paid in?

[LadyInTheRed]

We live in N. California so I knew lawyer fees could be higher than some others. We are having a lien strip done within the payments. Our lawyer required 3275 retainer and remaining of 5924 in our plan which we paid. During our 341 the trustee told our lawyer that he would need to submit reasons for higher than usual fees since our District allows for 2000 retainer with a total of 4800 (with lean strips). Anything over would be scroutinized.

I think you may not have that quite right. I think we are in the same division since the other divisions in our district don't have any mention of the $4,800 in their fee guidelines. Instead they have a longer menu of fees and, from those menus, I can't make the base, plus lien strip, plus anything else equal $4,800. The no-look cap in my (and maybe your) district is $4,800, plus $1,500 for a lien strip for a total of $6,300. Could it be that the court has a problem with the retainer and wants the rest included in plan? If so, and you have exemption available to exempt the $1,000, I think you should be able to keep it.

[tammygirl1]

I think you may not have that quite right. I think we are in the same division since the other divisions in our district don't have any mention of the $4,800 in their fee guidelines. Instead they have a longer menu of fees and, from those menus, I can't make the base, plus lien strip, plus anything else equal $4,800. The no-look cap in my (and maybe your) district is $4,800, plus $1,500 for a lien strip for a total of $6,300. Could it be that the court has a problem with the retainer and wants the rest included in plan? If so, and you have exemption available to exempt the $1,000, I think you should be able to keep it.

LadyInRed, I think you are right once I reread the 2nd to last paragraph. And I do have exemptions available so I hope in the end I can keep it..but I thought I would post what the document says for all..interesting..So if they refund the money but then do the a successful lien strip will my payment plan go up to account for lien strip later since you say its $4800 + 1500?

Comes now, Mrs. Trustee, Chapter 13 standing trustee, and requests that fees requested 'Attny', debtors' attorney be reviewed pursuant to Section 329(b) and that any compensation requested by this attorney in excess of the value of services rendered be ordered reduced.
FACTS
The debtors filed this case under Chapter 13 filing on July 29, 2010. Attorney 'Attny' prepared the debtor's petition and schedules. The Rights and Responsibilities and the Statement Pursuant to the Rule 2016(B) state that the fees charged in the case totaled $5,924 with the amount of $3,275 being paid prior to the filing of the case. The Guidelines for the attorney's fees for the Oakland Division and the Rights and Responsibilities state that initial fees for individual cases are limited to $4,800 and that any retainer over $2,000 will be closely scrutinized by the Chapter 13 Trustee and the Court.
This case is not a business case. Mr. 'Attny' filed a declaration that stated that he charged additional fees due to the fact that the case involved a lien strip motion, a vehicle loan, domestic support claims, a wage garnishment, and tax liabilities. The declaration goes onto state that the case was a priority.
Argument
11 U.S.C. Section 329 authorizes the Court to examine any agreement regarding services to the debtor in the connection with a debtors' petition. Under that section and FRBP 2017, the Court has the authority to order the return of the attorney's fees that exceed the reasonable value of the services provided. American Law Center v. Stanley, .....
In this case Mr 'Attny' has not shown any extraordinary circumstances for taking a higher fee and retainer. Most cases in Oakland include vehicle loans, wage garnishments, and tax liabilities. As to the domestic support claims, the only extra work required is to provide the Trustee's office with the name and address of the holder of the claim so that the Trustee may carry our her statutory duty to give notice. Motions to avoid liens are compensated with an additional $1,500 after the motion is complete and an ex parte application is filed with the Court and approved by the Chapter 13 Trustee.
Every Chapter 13 bankruptcy case is filed urgently and is a priority to the debtors involved. There are no extraordinary circumstances that indicate that this case merited a extra $1,000 retainer.
Therefore the Chapter 13 Trustee requests that Mr. 'Attny' be required to refund to the debtors $1,000, file an Amended Statement prusuant to Rule 2016(b) lowering his fees to a total of $4,800 and take the remaining balance of his fees through the normal distribution.

[LadyInTheRed]

LadyInRed, I think you are right once I reread the 2nd to last paragraph. And I do have exemptions available so I hope in the end I can keep it..but I thought I would post what the document says for all..interesting..So if they refund the money but then do the a successful lien strip will my payment plan go up to account for lien strip later since you say its $4800 + 1500?

Comes now, Mrs. Trustee, Chapter 13 standing trustee, and requests that fees requested 'Attny', debtors' attorney be reviewed pursuant to Section 329(b) and that any compensation requested by this attorney in excess of the value of services rendered be ordered reduced.
FACTS
The debtors filed this case under Chapter 13 filing on July 29, 2010. Attorney 'Attny' prepared the debtor's petition and schedules. The Rights and Responsibilities and the Statement Pursuant to the Rule 2016(B) state that the fees charged in the case totaled $5,924 with the amount of $3,275 being paid prior to the filing of the case. The Guidelines for the attorney's fees for the Oakland Division and the Rights and Responsibilities state that initial fees for individual cases are limited to $4,800 and that any retainer over $2,000 will be closely scrutinized by the Chapter 13 Trustee and the Court.
This case is not a business case. Mr. 'Attny' filed a declaration that stated that he charged additional fees due to the fact that the case involved a lien strip motion, a vehicle loan, domestic support claims, a wage garnishment, and tax liabilities. The declaration goes onto state that the case was a priority.
Argument
11 U.S.C. Section 329 authorizes the Court to examine any agreement regarding services to the debtor in the connection with a debtors' petition. Under that section and FRBP 2017, the Court has the authority to order the return of the attorney's fees that exceed the reasonable value of the services provided. American Law Center v. Stanley, .....
In this case Mr 'Attny' has not shown any extraordinary circumstances for taking a higher fee and retainer. Most cases in Oakland include vehicle loans, wage garnishments, and tax liabilities. As to the domestic support claims, the only extra work required is to provide the Trustee's office with the name and address of the holder of the claim so that the Trustee may carry our her statutory duty to give notice. Motions to avoid liens are compensated with an additional $1,500 after the motion is complete and an ex parte application is filed with the Court and approved by the Chapter 13 Trustee.
Every Chapter 13 bankruptcy case is filed urgently and is a priority to the debtors involved. There are no extraordinary circumstances that indicate that this case merited a extra $1,000 retainer.
Therefore the Chapter 13 Trustee requests that Mr. 'Attny' be required to refund to the debtors $1,000, file an Amended Statement prusuant to Rule 2016(b) lowering his fees to a total of $4,800 and take the remaining balance of his fees through the normal distribution.

Interesting. My attorney didn't file a motion to get the extra $1,500. But he did file the petition to strip before the 341 and submitted the order the day of the 341 after the trustee gave him a hard time for not already doing so. But, my retainer was only $1,500. It sounds like the trustee doesn't always make them file the ex parte petition for the $1,500, but is going to make your attorney jump through that hoop since he took too high a retainer.

Whether your plan payment will go up because of the additional $1,500 paid through the plan depends on whether your plan payment is big enough to cover all minimum amounts without increasing it. If you are paying 0% to unsecured creditors, your plan will probably go up by $25 if you are in a 60 month plan, more if your plan is shorter. If your plan pays unsecured creditors at least $1500, I think your payment will stay the same and the unsecured creditors will get $1500 less and your attorney will get it instead.

[Pandora]

Holy crap ! Nearly 6K to file CH. 13 w/a strip? Ugh! I think thats highway robbery at its best, so sorry you're having to go through all of this - but hopefully your Trustee will get that down for you.

Our 13 plan was $2500 flat fee; $26 for each amendment necessary paid up front; $250 for the AP - and anything else (like our current suits for violations from creditors) is free of charge - anything won will be split 50/50 as per agreement.

[tammygirl1]

So I thought I would give everyone an update on this. I received a letter yesterday from the courts about the hearing that occured on Dec. 7th. It was ordered that my lawyer send a check to the trustee for $1101 made out to us. The trustee is then to turn it over to us. Today we received a copy of the letter from our laywer to the trustee with a photocopy of the check for $1000 that wa sent to the trustee for a refund of the amount above the $2000 no-look retainer. I am estatic we are getting the money back but I am curious to know why the letter from the courts said we would be getting $1101 and lawyer sent only sent $1000. Yipee! This sure will come in handy during the holidays and help for the emergency fund that seems to get depleted every month for one reason or another.

[HHM]

Holy crap ! Nearly 6K to file CH. 13 w/a strip? Ugh! I think thats highway robbery at its best, so sorry you're having to go through all of this - but hopefully your Trustee will get that down for you.

Our 13 plan was $2500 flat fee; $26 for each amendment necessary paid up front; $250 for the AP - and anything else (like our current suits for violations from creditors) is free of charge - anything won will be split 50/50 as per agreement.

To be fair, no one, except an attorney, is in a position to say a certain fee is HIGHWAY ROBBERY. There is significant regional variation. I am not sure what the specific problem was in this area, but it sounds like either the courts are fairly harsh on BK attorney fees or the attorney didn't do a good job of itemize expenses (my guess is probably the later). If the attorney can SHOW the time invested in a case, the courts always allow the fees. In CO, if an attorney does not get AT LEAST $6,000 out of a chapter 13, then they are doing something wrong (meaning, they are not doing all the work to get the best case possible for the client; also, the CO Chapter 13 trustees object to everything and each judge has there own forms and way of doing things that make it extremely costly and time consuming). I am thinking the chapter 13 trustee in your area was trying to make an example of your attorney for some reason.

Bankruptcy is NOT a commodity. Attorneys have different levels of experience and provide different levels of service, the fee you pay is supposed to be based on the VALUE of the service.

Although there are exceptions to every rule, in general, in the bankruptcy market especially, the lower the fee, the worse off the client is, the case is far more risky because you have an attorney that is significantly limiting their service and time investment in your case.

[walkthaplank]

congrats on the $$$!