Chapter 7 Attorney fees

[sddebtor]

My bankruptcy attorney says that attorney fees must legally be paid prior to a Chapter 7 bankruptcy. Does anyone know if it must legally be paid or if the attorney just wants his money up front?

[SMinGA]

In a round about way, yes, its true.

part 1: If you do not pay in advance, then the atty fee becomes a debt - and unsecured debts get discharged in the BK. Since your atty is not in the habit of working for free, he wants to get paid.

part 2: I believe that for the filing fees (court required) to qualify for deferred payment, the atty is not able to accept any of his fees until the filing fee has become paid in full. If the atty has not accepted any of his legal fee, so that you can qualify to make the filing fee over the course of a couple of months after you have filed, then he subjects himself to the problem I described in part 1 above.

If you want legal representation, you'll have to pay for it. Attys are not required to work for free, and are allowed to set their own fees (within certain limitations).

[tjohnson29]

attorney fees

I Think he just wants his money up front. i just had my 341 meeting i am in the 60 day club now. my attorney asked for 4 post dated checks for $227 and some change for 4 months they only charge $899 plus filling fee so i have 3 more payments left and should be discharged october and the trustee was aware of the payments

[ccsjoe]

The three attorneys I did free consults with before choosing one all requested fees in full prior to filing so as not to become a creditor.

[HHM]

SMinGA is correct.

Although it may not, strictly speaking, be "legally" required, I believe it to be ethically required by the various attorney rules of professional conduct. The bulk of the work in a chapter 7 case is done before the case is ever filed. So, any unpaid atty fee at the time of filing is a debt. It is simply too much of a conflict of interest to have an attorney that is supposed to represent YOUR best interests and be a creditor of yours in your own case.

I personally would never recommend an attorney that required post dated checks or took payments after the case is filed.

[Exployer1234]

I had to pay my attorney's fees prior to actually filing my BK. The court broke the 299 payment into 4 payments. My BK is not discharged until I pay the court all 4 payments on time, and I had to sign a statement that if I did not pay the court the 4 payments on time my BK case will be dismissed.

[Maine]

I had to pay 1/3 before he would begin the work and the remaining 2/3 is due before he files with the court. If I do not pay him he becomes an unsecured creditor and I could legally include him in the filing and his bill would "disappear" the same as my credit card debt.

I don't believe there is a LAW that says he has to be pre-paid, but since he wants his money he requires it. He is well within his rights to make this part of the contract.

[gmk]

Just to add a different twist, my attorney collected $500 of his $1,000 fee and the $299 filing fee when we signed the papers before filing. So all the prep work was already complete. The other half he requested to be paid at the 341, which we did. I'm not sure if this is his normal MO, maybe he thought I had an honest face.

[tcreegan]

federal rules

Hi all,

In the new BK law, there are several disclosure forms that lawyers and BK petition preparers have to sign and give to the court. Some of them were regarding pay. One was to make sure the debtor had been informed of some stuff.

Under the old rules, an attorney who was collecting after filing had to have the debtor fill out a form stating that they understood that all payments past the filing date were optional/voluntary on the part of the debtor.

Given that, I think collecting up front is OK, probably good business practice in ch7 cases....

Tom in Colo

[tod183]

Mine charged $500 up front to file. They said they'd prefer I pay the rest ($900) by the 341.

[stormy]

I just signed my papers yesterday; I had to pay $850 before my case could be filed then filled out a statement saying I agreed to pay $100 per month starting September 1st until my balance of $685 is paid off.