“How much do you charge?” is often the first thing asked even before anything is revealed about the prospective client’s case. It is an obviously pertinent question as affordability is a key component of the process. Yet giving any precise answer at the beginning of the process is impossible as the complexity of the client’s problems and the scope of work is not yet known. No reputable, experienced attorney will quote a price up front without knowing what your case is about, any more than a plumber can quote you a price until they see the jobsite. However, affordability remains a factor in making sure that you can pull yourself out of the debt hole you’ve fallen into and LeverLaw is dedicated to making your case affordable.
Chapter 7 cases are flat fees. It is one set fee not dependent on hours worked. The attorney, not you, takes the risk of having to do more work than anticipated as opposed to you having to worry about additional fees. Certain aspects of the case require foreseeable work. Others can be unforeseen. Among the foreseeable, the more creditors you have the more we will be dealing with their inquiries both before and after the case. Those with businesses and the self-employed require more accounting for income than the employed where a mere calculation of pay checks easily determines income. A variety of other factors such as lawsuits, dealing with secured debt and other factors influence the workload of each case.
A good bankruptcy law firm quotes you an appropriate fee which is both reasonable and affordable. It is usually in the range of one or two months worth of minimum credit card payments to the credit cards for many of my clients. Compared to the status quo for my clients, the fees are almost incidental. For the peace of mind and level of service received, there are no comparable bargains in the field of law. The results achieved in debt relief are huge compared to the relatively minor fees and costs. My clients find my fee quotes reasonable, fair and have never found them an obstacle. Moreover, we are very cognizant of the market in Chapter 7 fees, and we always quote competitively to what you can be assured you are receiving a quote that compares favorably to what other similarly experienced attorneys are quoting.
On Chapter 13s the flat fee for the main case is essentially set by the bankruptcy court. So there is almost no difference among attorneys. Here in the Central District of California it is $5,000 for employed individuals and couples and $6,000 for the self-employed. This amount is encouraged by the adoption of a form called the Rights and Responsibilities Agreement (RARA) which eliminates the need for a fee application to the court so long as the client and attorney sign the RARA. Additional fees may apply if the services are outside the RARA, such as lien stripping a 2nd mortgage, but the RARA is designed so that most typical cases will be handled within the RARA fee.
We charge the RARA fee in Chapter 13 bankruptcy. However, it should be noted that this is rarely all paid directly to the attorney up front. Your cash outlay is usually a fraction of the entire fee as determined by the economics of your case. Chapter 13 debtors make a required monthly payment based on their ability to pay that is for a proposed term, usually 36 to 60 months. A certain amount of that normally goes to your general unsecured creditors. Those general unsecured creditors get paid less as the administrative claim of the attorney reduces their overall payout. Therefore, in effect, it becomes as if your creditors are paying part of your attorney fee in Chapter 13. Accordingly, cash outlays for attorney fees are often less in a Chapter 13 than a Chapter 7.
Keep in mind that bankruptcy is not for the destitute, but for the insolvent. The bankruptcy remedy by relieving debt can take the insolvent and render them solvent. But if you’re destitute or facing a complete lack of income with insufficient savings to fall back on, then either there is no point to filing bankruptcy (or at least now is not the time). Bankruptcy gets rid of your debt. It does not make you money. It does not help you eat and pay the rent. If you’re having problems paying your basic expenses your problems with your creditors can wait until you’ve figured out a workable basis for financial survival.
Regardless of your situation, we always offer a free consultation to make sure you initially get the proper advice regardless of whether bankruptcy is a viable option for you or whether now is the proper time to file a case. It doesn’t hurt to call and get good objective advice.