Outrageous Attorney Fee

[Loveandlight]

We filed in January. On my birthday. Happy birthday to me. Our attorney is a nice man, personally, but has no spine. He didn't even try to get us a more aggressive lower payment for our 5 year payment plan. In reality, and compared to others I have seen, it isn't THAT huge, but it's huge to US. It is $406/month. We seriously can't pay June, and have asked him for help in getting a suspension of the payment for three months so we can catch up on medical bills that were incurred after we filed (two trips to ER with kids, and one colon issue). We wrote him a week ago and he hasn't responded. I am fuming.

Clearly he wants our plan to succeed, because it also just hit me (again) that he charged us $6,000 for our CH 13 filing (we paid $1800 in the beginning and the rest is paid on our plan). Is this outrageous to you? It seems insane to me. I mean, $3,000, okay, but DOUBLE? I don't get it.

I'm very tempted to go to a different attorney. Of course we have no money for that, and I'm afraid of the process again, so the whole thing is discouraging.

Would you just not pay the payments, and submit bills to the Trustee, considering the attorney isn't getting back to us?

[HHM]

On average, that is what a chapter 13 costs. Not outrageous by any sense of the term.

If he submitted for $6,000, he will have to submit what is known as a long form fee application and itemized billing for court approval. So there is somewhat of a check and balance in place.

Also, some of that fee is designed to cover the "future". So, the attorney should be getting back to you?

When it comes to chapter 13's, there is the basic attorney fee disclosure, which lists a certain amount that has been accrued and is anticipated to accrue. Then the attorney submits a fee application to have the court approve the fees. Now, most districts have what they call a "no-look" fee. That is the fee set by the court that they will allow an attorney to charge without having to submit a long form fee application. In some districts, that no look fee is a maximum, in others it is a minimum. In Colorado, the no look fee is a "minimum". The no look fee in Colorado, last I checked, was $3,300.
In reality, assuming a $200-$300 per hour attorney fee, the "typical", run of the mill chapter 13 does add up to about $6,500. You start throwing in special issues like lien strips, lien removals, special debts (taxes etc), the fee easily climbs to $8,500 to $10,000 easy.

So, is $6,000 outrageous, no. But it sounds like you are having issues with the "service" your attorney is providing you. The issues are somewhat separate. Just because the attorney provides poor service, doesn't mean he hasn't done anything for you. Granted, it sucks. I hate to hear of a situation like yours when there are many very good attorneys out there, but this is the attorney YOU chose.

[TheBajan]

We filed in January. On my birthday. Happy birthday to me. Our attorney is a nice man, personally, but has no spine. He didn't even try to get us a more aggressive lower payment for our 5 year payment plan. In reality, and compared to others I have seen, it isn't THAT huge, but it's huge to US. It is $406/month. We seriously can't pay June, and have asked him for help in getting a suspension of the payment for three months so we can catch up on medical bills that were incurred after we filed (two trips to ER with kids, and one colon issue). We wrote him a week ago and he hasn't responded. I am fuming.

Clearly he wants our plan to succeed, because it also just hit me (again) that he charged us $6,000 for our CH 13 filing (we paid $1800 in the beginning and the rest is paid on our plan). Is this outrageous to you? It seems insane to me. I mean, $3,000, okay, but DOUBLE? I don't get it.

I'm very tempted to go to a different attorney. Of course we have no money for that, and I'm afraid of the process again, so the whole thing is discouraging.

Would you just not pay the payments, and submit bills to the Trustee, considering the attorney isn't getting back to us?

I'm not sure how it would work for you to try to get another atty once you are already in the process. I think it would be difficult even if you didn't take the additional cost into consideration. I'm sorry to hear about your frustration with you atty. I would be on the phone to his office daily if it's that important. Unfortunately, I think you are stuck with this guy. When we were looking for an attorney we learned that BK fees are regulated. They vary from state to state but within the state they stay within a given range.
Best wishes,
The Bajan

[kornellred]

When my Chapter 13 was filed in March 2008, my attorney told me that all attorneys were constrained by law as far as Chapter 13 fees were concerned. In 2008, the maximum that an attorney could charge was on the order of $3400 plus the filing fee. That was for a simple, no-asset case. All of the other legal functions associated with property and asset handling are based on an a-la-carte fee schedule.
I do not think that the mandatory maximum Chapter 13 fee set by law has increased that much.

[HHM]

When my Chapter 13 was filed in March 2008, my attorney told me that all attorneys were constrained by law as far as Chapter 13 fees were concerned. In 2008, the maximum that an attorney could charge was on the order of $3400 plus the filing fee. That was for a simple, no-asset case. All of the other legal functions associated with property and asset handling are based on an a-la-carte fee schedule.
I do not think that the mandatory maximum Chapter 13 fee set by law has increased that much.

kornellred, the issue of chapter 13 fees if very much district by district. There is no 'set' maximum fee for a chapter 13. Some districts will treat their no-look fee as a "presumptive" maximum unless the attorney showed he did more work than what is anticipated to be covered by the no-look fee. Even the no-look fee vary's by district. In other districts, the no look fee is simply the minimum an attorney may charge assuming the attorney provides a basic list of services outlined by the court.

[justbroke]

In my District, I was going to be charged $3,500-$4,500 up front plus $3,000 in the plan. So that's $6,500 to $7,500 from the few attorneys that I consulted for a Chapter 13. Of course, I had a lien strip so that inflated it a little more.

As HHM writes, many Districts have basic "no-look" prices for Chapter 13s and the attorneys can charge that amount without needing any detailed billing (at least that I can tell). When it gets into values over the "standard" pricing, then the attorney needs to file a fee application.

I guess most people don't understand the amounts paid "in-plan". I fond that a portion of that is for "monitoring" and not actually for any additional work necessary. I have seen plans where the attorney claimed monitoring fees of $50/month for 60 months (which is magically... $3,000).

[kornellred]

Crimony! I guess my attorney just told me about what my district "no look" maximum fee was. When he mentioned that the amount quoted was the maximum allowed by law, I assumed that held true for everyone, everywhere. I paid the entire fee up front. My Chapter 13 filing could not have been simpler. Four more payments and I am done. I can't wait! (my plan was 54 months)