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Bankruptcy Costs – You get what you pay for!

 

During my 15 years of practicing bankruptcy law, the question I get asked the most is “If your clients are filing for bankruptcy, how do you get paid?” This is a perfectly legitimate question. How do attorneys get paid? It all depends on what type of bankruptcy the client is filing.

Chapter 13 Fees:
In the Dallas/Fort Worth area, the fees are set by the court and are usually $3,500 + court costs for a consumer Chapter 13 case. This is a flat fee that includes the basic, routine services in a Chapter 13 case to include filing the petition, preparing the Chapter 13 plan and attending all the meetings and hearings that are necessary to get that Chapter 13 plan finalized and approved by creditors and the court alike. For most bankruptcy attorneys, they take a small down payment of between $500 and $1000 and the remainder of the fee gets paid through the Chapter 13 plan. Since most Chapter 13s will cost $3,500, it doesn’t make a lot of sense to base your attorney selection on price. That’s when you will need to start looking at quality, experience and reputation of the law firm you will select to represent you in your Chapter 13 case, usually for 5 years! Once the case is filed, fees are added to the Chapter 13 and the bankruptcy attorney is paid through the plan.

Chapter 7 Fees:
Chapter 7 fees can range quite a bit from attorney to attorney but again, attorney’s fees for this type of bankruptcy are still somewhat “set” by the court in that unreasonably high fees may be rejected by the court. Debtors are more likely to shop around for a better price as they speak to one attorney after another but again, it isn’t always a good idea to base your selection on costs. One firm’s bargain basement price may mean you are just another number in their long list of cases pending to be filed. If you charge a below market price, then you have to retain more clients to make up the difference. Think of it as the dollar menu for many fast food chain restaurants. Yes, you get a quick, cheap meal but it’s likely to make you sick later because it has to be mass produced with inexpensive ingredients so that the restaurant makes a profit. That just can’t be good for you! Once you decide to file the Chapter 7, most firms offer a plan payment to pay off the case before they will actually file it.
Your decision to file for bankruptcy is a serious one with long term implications. Do not order off the dollar menu. Please contact the law firm of Bailey & Galyen for your free consultation today. Our 50 years of combined experience will ensure that you receive top notch legal representation at a fair cost to you and we will work with any budget. Contact us today!