What are considered reasonable attorney fees?

[mountanddo]

But is butterfly gonna have to pay $250 per hour for her to ask questions and learn?? And if #2 asks #1 questions - do they both charge her their hourly fee?

The research time that a fairly new (to BK) lawyer may have could be very costly when billed by the hour.

Just my thoughts... Those and a buck will buy you a cuppa coffee.

When I asked my attorney what they charged she gave me a flat rate. $2500 for C-13 and $3200 for C-7. plus filing fees. Since I can't file C-7 for another year it was a simple choice but even if I could of filed C-7 there was no way in H*ll I'd ever have been able to come up with $3200. I am able to pay my entire fee through my C-13 less the filing fees. She didn't say anything to me about an hourly rate, just the flat fee.

If that were me I'd want the attorney that I made the appointment with. You are hiring them, they shouldn't be able to just put anyone on your case. I'm sure anyone here, if they met with a attorney new to BK, would be leary about letting her handle their case. If you are going to pay the same upfront fee for either attorney I would insist on the experienced one. Just my .02.

[lillymarlene]

One of the attorneys I had set up an appointment to meet with last year, sent his paralegal instead. I felt that if the person I was supposed to see couldn't deign to meet with me, well then he didn't deserve my business, period. I don't like to be a "hard" person, things can happen to people, where they can't make a meeting, but to me, this was just too important.

[butterfly57]

Thank you everyone that has replied. You have given me plenty of "food for thought". I plan on scheduling a couple different consults with some other attorneys. I need to see if anyone else makes me feel a bit more informed and comforted instead of feeling taken advantage of.

My husband is getting quite worried with me, I tend to get a bit obsessive when dealing with something stressful. I like to stay as informed as possible and luckily I found the site to do just that! I just have to learn to give myself a break and get some sleep! But, it is nice to hear that there is life after bankruptcy.

[jeff6898]

My attorney is charging us $1,600 for a chapter 7. That includes filing fees ect. What I like about him I only had to give him $100 upfront and I am paying the rest out. He also has me referring all calls to him after the initial $100 down payment. So far calls have stopped since I dtarted doing that. No idea why since I actually have not filed yet. Guess them knowing I am filing is enough so far.

[LadyInTheRed]

I agree with HHM. This doesn't sound like a simple case and you can't determine what is reasonable fee for your case based on what people all over the country have paid. Every case is different and attorney fees vary by location, experience, reputation and the level of services that will be provided. The hourly rates quoted are on the high end, but not out of range of what high quality firms charge for experienced partners and the associates they mentor and supervise, at least in the major metroplitan area where I am.

I am not at all troubled that the attorney had you meet with his associate. If he hadn't greeted you and explained why, I might feel differently. I'm assuming the older attorney is the sole owner or a partner of the firm. Even if you meet with the partner and the partner is the only person you ever meet, chances are that a bulk of the work will be done by an associate and/or paralegal. The fact that the associate left the room to ask the partner questions is a good sign that she is being adequately supervised and seeks supervision when needed. While you will probably be billed for some supervision time, you shouldn't be billed for all of it, especially if the associate is still learning the ropes. A good firm will have mechanisms in place to make sure a client is not billed for training time. But, those mechanisms are not perfect. If you end up being billed for more than the original quote, you can ask to review detailed time records and can dispute anything that looks unreasonable. But, remember that a less experienced attorney's fees are lower partly because they will require supervision by a more experienced attorney with higher rates. So, you may be billed for the time it takes the more experienced attorney to review the other attorney's work and discuss it with her. But, that should even out if the attorney with the lower billing rate is doing most of the work.

You should defintely consult with a couple more attorneys and choose one you feel is qualified and who you are comfortable with. But, fees should not be the primary factor in your decision of who to hire. This is not the place to bargain shop.

[BnkrptcyLwyr]

This I can tell you from here in Michigan, and this is just me. My fees range depending on the complexity of the case. Furthermore, I have to take into account the fact that in Michigan, we have a few "bankruptcy mills" who advertise some ridiculously low fees (but when you get there, you find out they're charging more), and there are a quite a few newer attorneys flooding the market. Consequently, fees are generally lower for Chapter 7's. My cheapest rate is $1,000 plus costs for the easiest cases, up to $2,000 for more complex cases, plus costs. I make clear that ours is *not* a flat fee, and that the bill can run more. I tell clients that my fees are based on the amount of work. I'm so efficient and thorough that I come in close to the amount of the retainer, and am over very little. In my 341's, even in complicated cases, we're in and out in no time, with few questions. Usually, all the paperwork has been sent, the schedules are complete, and my clients are glad to see us walking in and out while other debtors are having their 341's adjourned because the attorney forgot to list something, failed to send docs, etc.

So why am I telling you all this ... because it is possible to find a good attorney at a reasonable price. To me, $4,000 is a lot if this is a straightforward case. 500/hr is a lot to pay. But I can tell you that there are some people who need the more experienced (and more expensive) attorneys.

But you also have to be careful about going too cheap as well ... you do get what you pay for in this field.

We had a client come in and meet with one of the attorneys, and the attorney wanted to be thorough because there were potential exemption issues (the 6th Cir. Bankruptcy Appellate Panel recently ruled that a certain major Michigan exemption statute was unconstitutional). Well, the client didn't like the fact that the attorney wasn't willing to give her an absolute answer about what would be best - hey, we needed to see some property docs - the client thought the attorney was being wishy-washy. So, this potential client went to some newer attorney who said "oh yeah, no problem, we can exempt that, blah, blah, blah." So client apparently decided to go to the newer attorney. Well, this potential client actually has the cajones to write a letter to the attorney (who has been successfully practicing for like 15 years) and tell her what a rotten attorney she was, and how her attorneys were so much better ... ok, whatever. So I looked up what her attorneys were doing to find out that they filed a Chapter 7, claimed the unconstitutional exemptions, the house had all kinds of equity ... the attorneys end up converting the case to 13 (obviously to deal with the equity issue in the house) ... they've changed the exemptions ... the plan payment is underfunded because they're not paying out the amount they're supposed to be paying under the liquidation analysis ... it appears that these attorneys file all Chapter 7's, and have filed very few Chapter 13's ... and oh year, they're newbies who have been doing bankruptcy since 2009 ... in short, the case is a mess.

So obviously I'm telling you this to tell you (1) not to just be impressed by some attorney who is so sure of themselves and is telling you what you want to hear, and (2) don't pick the attorney who's the cheapest, it may cost you more in the long run.

[BnkrptcyLwyr]

Most cheaper attorneys will let the chips fall where they may and barely advise you on how to get the best BK.

And that is too true. I know far too many who leave their clients high and dry when problems arise and will absolutely do nothing. So sad. But then, those clients wanted cheap, and weren't willing to pay for good or great. When the first question the person asks is "how much do you charge" ... well, I'm quite sure I don't even want to waste my time with that potential client.

[mountanddo]

When the first question the person asks is "how much do you charge" ... well, I'm quite sure I don't even want to waste my time with that potential client.

That's a rather harsh statement. Your clients ARE going bankrupt. You have to expect that that is going to be a major concern when choosing an attorney. I do agree that you get what you pay for but some on this forum are struggling just to find the money to pay their attorney. If they are facing judgements and garnishments some might not have a choice but to go with a more inexpensive attorney. Not everyone realizes how complicated bankrupcy can become either so it's only natural that that would be one of the first questions they would ask.

[butterfly57]

Thanks all for the continued ideas, views and experience in this area. Just a quick update: I cancelled my appointment with an attorney I was to see Tues. The reason mainly is I went online and read reviews (I research alot before hiring or getting vehichles serviced, etc). Out of 5 stars she averaged a 2.7 stars and complaints were phone calls not returned, not enough information provided, things important obviously to me. Someone on this forum that lives in my area has recommended her attorney and I researched him and his firm and he came out 5 stars all the way with many, many reviews from different places singing his praises. I realize the reviews on the attorney's own website is biased so I barely pay that full attention. So I have an appointment with him next week. I also called back the attorney I went to and plain out asked his secretary if he would consider adjusting his rate a bit considering I had done business with him in the past and paid him back then over $10,000 easily in fees. She told me it wouldn't hurt to ask. She also said my case is a bit complicated because of the capital gains tax situation and property owned with my ex (house he's living in). She did admit that this attorney is one of the highest in the area but she assured me that his associate who's been with the firm 3 years and prior to that worked at a firm that dealt with big corporations, that whatever she does goes through the senior attorney who is in fact the owner of the firm. She called me back within the hour and told me he'd knock $250 off his fee. Still needing half up front to start but that between her and I he was very good about small payments coming in prior to filing. Looking back over my paperwork from my business and emails with my tax consultant and this attorney from 2008-2010 it appears I probably do have a rather complex situation and definitely am in need of someone very experienced. Also, he seems to be friends with one of the trustees in my area.....not sure if that is good or what?

[keepsmiling]

I'm in pricy NJ and that is the highest fee for a 7 I've heard.

[AZNoName]

My Ch13 cost 2K due by filing day, and another 2K as part of the payment plan coming up to 4K total. (I ended up only paying 3K total though, I got a 25% discount from my prepaid legal benefit at work though, glad I opted in for that!)

[butterfly57]

Because this attorney knows my history with closed business is he more valuable?

This I can tell you from here in Michigan, and this is just me. My fees range depending on the complexity of the case. Furthermore, I have to take into account the fact that in Michigan, we have a few "bankruptcy mills" who advertise some ridiculously low fees (but when you get there, you find out they're charging more), and there are a quite a few newer attorneys flooding the market. Consequently, fees are generally lower for Chapter 7's. My cheapest rate is $1,000 plus costs for the easiest cases, up to $2,000 for more complex cases, plus costs. I make clear that ours is *not* a flat fee, and that the bill can run more. I tell clients that my fees are based on the amount of work. I'm so efficient and thorough that I come in close to the amount of the retainer, and am over very little. In my 341's, even in complicated cases, we're in and out in no time, with few questions. Usually, all the paperwork has been sent, the schedules are complete, and my clients are glad to see us walking in and out while other debtors are having their 341's adjourned because the attorney forgot to list something, failed to send docs, etc.

So why am I telling you all this ... because it is possible to find a good attorney at a reasonable price. To me, $4,000 is a lot if this is a straightforward case. 500/hr is a lot to pay. But I can tell you that there are some people who need the more experienced (and more expensive) attorneys.

But you also have to be careful about going too cheap as well ... you do get what you pay for in this field.

We had a client come in and meet with one of the attorneys, and the attorney wanted to be thorough because there were potential exemption issues (the 6th Cir. Bankruptcy Appellate Panel recently ruled that a certain major Michigan exemption statute was unconstitutional). Well, the client didn't like the fact that the attorney wasn't willing to give her an absolute answer about what would be best - hey, we needed to see some property docs - the client thought the attorney was being wishy-washy. So, this potential client went to some newer attorney who said "oh yeah, no problem, we can exempt that, blah, blah, blah." So client apparently decided to go to the newer attorney. Well, this potential client actually has the cajones to write a letter to the attorney (who has been successfully practicing for like 15 years) and tell her what a rotten attorney she was, and how her attorneys were so much better ... ok, whatever. So I looked up what her attorneys were doing to find out that they filed a Chapter 7, claimed the unconstitutional exemptions, the house had all kinds of equity ... the attorneys end up converting the case to 13 (obviously to deal with the equity issue in the house) ... they've changed the exemptions ... the plan payment is underfunded because they're not paying out the amount they're supposed to be paying under the liquidation analysis ... it appears that these attorneys file all Chapter 7's, and have filed very few Chapter 13's ... and oh year, they're newbies who have been doing bankruptcy since 2009 ... in short, the case is a mess.

So obviously I'm telling you this to tell you (1) not to just be impressed by some attorney who is so sure of themselves and is telling you what you want to hear, and (2) don't pick the attorney who's the cheapest, it may cost you more in the long run.

Thanks so much for your thoughts on this. I agree, you get what you pay for. My case may be a bit more complex than the norm, I'm really not sure what's considered "easy" or "normal" to be honest. This attorney that my ex and I used during the close of our business and the sale of the property the biz operated off of, we used this same attorney that's charging these high fees. He did come down $250 in his overall price from $3,500 to $3,250 not including court costs, credit counseling, etc. And then anything over and above that price the hourly rates come into play. So he knows alot of my history and has lots of files already on hand if any questions come into play about the business, the capital gains taxes and the trust fund he kept for us and paid bills out of. So does that make him more valuable to me than bringing on someone new to my situation?

[btbeme]

My two cents worth...

When paying for an attorney, we feel as if we are paying them to make sure everything will be done "right." In actuality, we are paying them for their work in case something goes "wrong."

So how much would you be willing to pay to get your life back in order if the filing goes completely sideways? In that sense, whatever we are charged would seem like a bargain.

You case sounds like there are some wrinkles and bumps. A good attorney is well worth their fee to keep those wrinkles and bumps from derailing the process or costing you much more in the long run.

[BnkrptcyLwyr]

That's a rather harsh statement. Your clients ARE going bankrupt. You have to expect that that is going to be a major concern when choosing an attorney. I do agree that you get what you pay for but some on this forum are struggling just to find the money to pay their attorney. If they are facing judgements and garnishments some might not have a choice but to go with a more inexpensive attorney. Not everyone realizes how complicated bankrupcy can become either so it's only natural that that would be one of the first questions they would ask.

Let me clarify a little bit, because you also have to know that when that's the first question, it's far too often the *only* question the person really cares about ... I'm on the other end of the phone, so I can tell.