I often get asked this important question by concerned potential clients. It is very difficult, if not impossible, to answer how much the attorneys fees for any bankruptcy will be before having a consultation and getting all the relevant information. It’s even more difficult to do in a Chapter 13 bankruptcy case.
Why?
Let’s say that the base bankruptcy attorney’s fee is $4,000 for a regular, non-business debtor Chapter 13 case, plus the $274 filing fee and necessary credit counseling courses. In most cases, that is NOT how much you have to pay to your attorney before filing your case. Why not? Because part of the attorneys fees can be taken from your monthly plan payments that you will have to make anyway in your Chapter 13 case. How much can be taken through your plan payments? That depends on 1. What your monthly plan payment is, which is determined by the complex means test analysis; 2. Whether by making the additional payments for attorneys fees, it would render you unable to pay certain necessary debts which need to be paid 100% in your plan (such as taxes, or mortgage arrears, etc.).
For example, if the means test is showing that your monthly plan payment is $200 per month for 36 months, and you are filing the bankruptcy case in order to repay $7,200 of past due amounts on your mortgage (arrears), then you do not have any more income available to pay your attorneys fees through your plan. If you added another $3,000 of attorneys fees, it would raise your monthly payment by approximately $100 per month. (Plus, most attorneys aren’t going to wait that many months to be paid their fees).
This was just a quick example, but I think it illustrates why it is necessary to have a complete consultation with an attorney before they can give you an accurate fee quote and let you know how much you’ll have to pay up front to file a Chapter 13 case for you.
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