Attorney fees question

[onthebrink]

We were quoted $2500 to file a C7 by a BK attorney. We have also discussed a debt settlement option and they asked for a deposit of $5000. The $2500 for C7 seems about right but the request for a $5000 deposit for negotiating debt settlement caught me off guard.

Thoughts?

Thank you

[LadyInTheRed]

I believe the court limits the amount an attorney can charge for BK. Also, assuming your BK is straight forward, the amount of work is predictable once they know the details of your case. It's hard to predict with any certainty how much time in attorney hours it will take to negotiate a debt settlement. Sine you say a "deposit", I assume the $5,000 is a retainer, not a flat flee. They'll bill their time until it reaches $5,000, then ask you for more money if you want them to continue work. Make sure you understand whether it is a retainer or a flat fee.

[HHM]

I believe the court limits the amount an attorney can charge for BK. Also, assuming your BK is straight forward, the amount of work is predictable once they know the details of your case. It's hard to predict with any certainty how much time in attorney hours it will take to negotiate a debt settlement. Sine you say a "deposit", I assume the $5,000 is a retainer, not a flat flee. They'll bill their time until it reaches $5,000, then ask you for more money if you want them to continue work. Make sure you understand whether it is a retainer or a flat fee.

Correct except in the point that the BK court limits the fees. That is not exactly accurate. Granted, there is a range of fee the court will accept without scrutiny, but an attorney can charge more so long as the attorney can justify the expense.

Otherwise, correct, DS to some degree is more unpredictable than BK. Hence, one of the BENEFITS of BK, it puts the debtor in control of debt, not your creditors. Ultimately, with DS, the creditors have to say yes. In BK, your creditors have no choice.

Still, I have yet to have anyone convince me that DS is a better option than BK UNLESS BK would result in loss of more money or assets than DS (which is very rare).

[onthebrink]

I was quoted $5500 for a C13 filing by a BK attorney today. That sounds incredibly high. This is in Northern CA. Same firm quoted $2500 for a C7.

[LadyInTheRed]

Correct except in the point that the BK court limits the fees. That is not exactly accurate. Granted, there is a range of fee the court will accept without scrutiny, but an attorney can charge more so long as the
attorney can justify the expense.

Thanks for the clarification, HHM.

[espo1357]

I was quoted $5500 for a C13 filing by a BK attorney today. That sounds incredibly high. This is in Northern CA. Same firm quoted $2500 for a C7.

Got quoted the same for the 13.
check with your workplace to see if you have group legal!

[coolmom04]

we are paying $1700 for ch7 (includes retainer fee, attorney fee, filing fee & debt counseling fee). - not a BK mill

But, the first attorney we met with wanted $2900 for all the same services/stuff! - BK mill.

[klandsb]

I guess it must go by your area. I am in PA and my Chapter 13 attorney fees were $2700.00. A Chapter 13 was quoted at $ 1200.00....
Your fees seem high but maybe for CA that is normal ??

[MSbklawyer]

I guess it must go by your area. I am in PA and my Chapter 13 attorney fees were $2700.00. A Chapter 13 was quoted at $ 1200.00....
Your fees seem high but maybe for CA that is normal ??

That's close to the norm in South Mississippi too. Our no look attorney's fee for 13s are $2800 (not including filing fees and credit counseling). For 7s, they range from $1200 to $1500 (not including filing fees and credit counseling) for everyday personal bankruptcies.

[OutofTime]

I was just saying to a friend how great would it be to be a bk lawyer right now especially in southern ca. Consultation, paperwork, 341 meeting, and discharge seems like easy money for 1200-1800 a pop per bk case. Can't imagine how busy though they will be this year alone. Guessing lack of time to focus on each case foe trustees benefits us though!

[HHM]

I was just saying to a friend how great would it be to be a bk lawyer right now especially in southern ca. Consultation, paperwork, 341 meeting, and discharge seems like easy money for 1200-1800 a pop per bk case. Can't imagine how busy though they will be this year alone. Guessing lack of time to focus on each case foe trustees benefits us though!

Well, your leaving out the hours of prep, phone calls, email, dealing with creditors, review, etc. Frankly, I think any attorney who charges less than $2000 for a BK doesn't understand the value of their time, but hey, most attorneys are bad business people.

[MSbklawyer]

I think any attorney who charges less than $2000 for a BK doesn't understand the value of their time . . .

I agree. But the market just won't bear it. There are a lot of out-of-work lawyers out there. I feel truly sorry for anyone just graduating law school right now unless they are from a top tier school.

Bankruptcy has been less affected by the downturn, and thus you see a lot of lawyers taking bankruptcy cases who have never handled one before. I think that's the source of some of the horror stories that come across on this forum.

[HHM]

I agree. But the market just won't bear it. There are a lot of out-of-work lawyers out there. I feel truly sorry for anyone just graduating law school right now unless they are from a top tier school.

Bankruptcy has been less affected by the downturn, and thus you see a lot of lawyers taking bankruptcy cases who have never handled one before. I think that's the source of some of the horror stories that come across on this forum.

True, true.

I don't necessarily buy the idea that the Market won't bear it, certainly not if you are not doing something to differentiate yourself. But if you have a value offer beyond what most of the loser BK attorney's offer, you will get clients, probably work less and make more money.