Chapter 13 Attorney Fees
Attorney fees for a Chapter 13 bankruptcy tend to be more expensive than attorney fees for a Chapter 7 bankruptcy case. There’s a much greater workload associated with filing a Chapter 13 case.
Unlike Chapter 7 bankruptcies, which usually take around four months to complete, Chapter 13 cases are open for 3 to 5 years. Plus, Chapter 13 bankruptcies are more complex and must include a proposed repayment plan specifying which creditors will be repaid and by how much, which requires court approval.
It isn’t necessary to pay all of the attorney fees upfront in a Chapter 13 case as it is in a Chapter 7 case. Usually, a Chapter 13 bankruptcy lawyer will require a portion of the attorney fees be paid before filing the case. The remaining attorney fees will get paid through the Chapter 13 plan. The filer will make a monthly payment to the trustee, who will then make payments to the filer’s creditors â including their attorney who filed the case. Outstanding attorney fees at the time of filing are not paid in addition to the plan payment, they’re part of the plan payment.
Lawyers can ask for priority to receive full payment before certain other creditors. This helps attorneys be more willing to file Chapter 13 cases before full payment of attorney fees because it minimizes the risk of not being paid if the filer later stops making plan payments.
How Much Does Bankruptcy Cost In 2021
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In a Nutshell
Bankruptcy costs include court filing fees, credit counseling course fees, and if you hire a bankruptcy lawyer, attorney fees. The total cost will largely depend on your financial situation, the complexity of your case, and whether you file Chapter 7 or Chapter 13 bankruptcy.
Chapter 7 bankruptcy provides relief for individuals and businesses that have no hope of ever repaying their debts. Thatâs why it seems strange to some that there are actual costs involved to get this relief. Keep in mind, though, that everyoneâs case is different and someoneâs inability to pay their debts as they come due does not necessarily mean that they canât pay the costs of filing a Chapter 7. Letâs take a look at what they are.
Bankruptcy costs include court filing fees, credit counseling course fees, and if you hire a bankruptcy lawyer, attorney fees. The total cost will largely depend on your financial situation, the complexity of your case, and whether you file Chapter 7 or Chapter 13 bankruptcy.
Read on to learn about how much it costs to file bankruptcy along with helpful, cost-reducing options that may be available to you.
Flat Fees Versus Hourly Fees
Many attorneys, especially bankruptcy attorneys, will charge a “flat rate” to represent you in a bankruptcy case. You’ll pay a fixed amount for the attorney to represent you, regardless of the amount of time the attorney spends on your case.
Other attorneys will charge you an hourly rate, although it’s uncommon in consumer bankruptcy cases. The more likely scenario is for the attorney to charge a flat fee for the bulk of the matter. The lawyer will charge an hourly fee for any extra work required for services like defending against an objection to discharge. Your contract should spell out what the flat fee covers.
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An Attorney Will Be Your Advocate During Your Case
Once you file your case, you’ll need to provide documents to the trustee and attend a 341 meeting of creditors. A bankruptcy attorney will ensure that the necessary papers get to the trustee in a timely fashion and attend the creditors meeting with you. If any issues arise, you’ll have a knowledgeable partner to guide you through the process and ultimately, help you obtain the discharge that will wipe out your dischargeable debt.
What Documents Does A Bankruptcy Attorney Need
When you have your first meeting with a bankruptcy attorney, you should bring all of the documents that you will need to file bankruptcy. This includes records of all outstanding debt obligations and proof of all income sources and assets. You should also bring copies of your last two years of tax returns.
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Average Chapter 7 Bankruptcy Attorney Fees
Most Chapter 7 bankruptcy attorneys will base their fees on how complicated your case is and what other attorneys in the area would charge for a similar bankruptcy. If you have a lot of assets or debt, you might pay more than an unemployed person with no assets.
In general, attorney fees for a Chapter 7 bankruptcy range from $1,000 to $3,500 depending on the complexity of the case. Larger firms with more advertising and overhead costs sometimes charge more than a solo practitioner, but not always. Some larger operations offer low fees and count on a higher volume of cases. Also, you might find a solo practitioner will cost more but offer more personalized service. It will depend on the office.
You can expect a newer attorney to charge less than a more experienced lawyer, and if your case is a simple Chapter 7, you might not need an attorney with years of experience. Keep in mind, however, that bankruptcy is a specialized area of law and that most attorneys who don’t regularly practice bankruptcy won’t accept a bankruptcy case.
When shopping around for a bankruptcy lawyer, call at least a few attorneys in your area. Compare their fees and ask if bankruptcy is an area they specialize in, as well as the number of cases they file each month.
Find out more in What to Look for in a Bankruptcy Lawyer.
How To Pay For Your Bankruptcy
Filing for bankruptcy will cost you even though youre in no position to pay. Yes, in perhaps the ultimate Catch-22, youll need money to let your creditors know you dont have any.
Though covering the cost of bankruptcy might not be the largest problem on your agenda, it is an issue. Most bankruptcy petitions require some form of legal help, and the more complicated the filing, the more help youll need. That means hiring a lawyer, and unless you know one who works for free, it will require money.
Legal fees are the biggest headache, but not the only one. Youll also have to pay court costs and a fee for mandatory credit counseling. The combined bill could run into the thousands of dollars, so before you load up your briefcase and head for the courthouse, you need to know what you need to do, how much it will cost and where youll find the money.
If youre unable to borrow enough money from family or friends to pay a lawyer, other options exist:
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How Much Tax Will You Have To Pay As A Bankruptcy Lawyer In New York City Ny
For an individual filer in this tax bracket, you would have an estimated average federal tax in 2018 of 22% and an added New York state tax of 6.33%. After the combined taxes have been taken out, Bankruptcy Lawyers could expect to have a take-home pay of $59,516/year, with each paycheck equaling approximately $2,480*.
* assuming bi-monthly pay period. Taxes estimated using tax rates for a single filer using 2018 federal and state tax tables. Metro-specific taxes are not considered in calculations. This data is intended to be an estimate, not prescriptive financial or tax advice.
What Is It Like Working With Legal Aid
If you call a legal aid organization, you can expect a phone operator or paralegal to first ask questions to determine whether you qualify for their free assistance and to see if youâre a good fit for bankruptcy.
Different legal aid organizations collect this information in different ways.
Sometimes it will entail asking you to come into their office for an interview. Sometimes it will entail filling out a paper or online questionnaire.
As you complete this questionnaire, it is important, once again, to remain totally honest. The information you provide will go onto your bankruptcy forms that are submitted to the court.
If your legal aid organization provides help in a limited assistance capacity, like nonprofits such as Upsolve do, then youâll be responsible for filing the actual bankruptcy forms on your own and showing up by yourself to the 341 meeting.
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Bankruptcy Education Courses: $50
One small fee that you mustnt forget covers credit counseling. Completion of two credit counseling courses is required for petitioners in both Chapter 7 and Chapter 13 cases. You must consult a nonprofit credit counseling agency to arrange to take the course. The Office of the U.S. Trustee, the federal agency that oversees the counseling requirement, sets reasonable fees for such courses at free to $50. The course can be taken in person or online.
Bankruptcy Lawyers In Manhattan New York Can Help You
If you’re experiencing severe financial difficulties, bankruptcy can provide a path to debt relief and help you get a fresh start. Whether you are just starting to consider bankruptcy or have already filed, getting a bankruptcy lawyer involved can help you maximize the benefits afforded to you by the United States Bankruptcy Code. We’ve assembled a list of trusted local lawyers that you can use to find the right Manhattan bankruptcy attorney to help you stop wage garnishment, prevent creditor harassment, get debt relief, and protect your property.
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Turn To Strategic Business Bankruptcy Lawyers Who See The Big Picture
The laws covering debtor protections, creditors rights and related issues are complex and evolving. Whether your goals center on a workable plan for financial restructuring or recovery of obligations owed to your business by another company, you can turn to our firm for knowledgeable, practical guidance. We are trial-ready attorneys, ready to address the most complicated bankruptcy cases, including those in which conflicts arise.
Look For Bankruptcy Lawyers You Feel Comfortable Working With
Before you hire a bankruptcy lawyer, you should make sure that you feel comfortable working with the one you choose. Consider what you want to get out of your bankruptcy case and then look for a lawyer who can realistically help you achieve your goals. Its also a good idea to speak with more than one attorney, if possible. Some attorneys will spend a lot of time on the initial interview, while others may not spend as much time with you.
Bankruptcy cases require revealing a lot of information that you may not have ever shared before. Competent bankruptcy lawyers in New York City will ask you questions to get a sense of what the overall picture of the case is. Questions may include:
- questions about work history
- questions about marital history and family
- questions about shopping habits and purchases
- questions about income and expenses
Since these questions are very intimate, you want to feel comfortable with the person you are sharing that information with.
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Payment Plans For Either $125 Or $200 A Month Depending On How Fast You Want To Pay Off Your Bankruptcy
I am going to tell you our standard fees for a Chapter 7 and a Chapter 13 right at the start so that people who are looking to compare numbers between Law Offices, bankruptcy prep companies and doing it themselves do not have to go through this entire blog post. Attorney fees at my firm for a Chapter 7 bankruptcy filed in New York or New Jersey is $1680 and we charge the standard New Jersey Presumptive / No Look Fee for a Chapter 13 Bankruptcy filing in either New York or New Jersey and take a $1000 down payment to begin the work on a standard Chapter 13 Bankruptcy.
Will Bankruptcy Take Care Of Your Debt
Some types of debtâcalled nondischargeable debtâwon’t go away in bankruptcy. An attorney will carefully review your bills and explain what you’ll be able to discharge .
However, even if all your debt is nondischargeable, bankruptcy still might be a good option. An attorney will explain that you can spread out your overdue bills over three to five years in Chapter 13 bankruptcy and that your creditors won’t be able to harass you during that time.
Before advising you about your options, the attorney will likely inquire about the following types of debt:
- unsecured debt, such as credit card balances
- past due taxes
- domestic support arrearages, such as child or spousal support
- student loan obligations
- vehicle loan balances.
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The Cost Of Hiring A New York Bankruptcy Attorney
As you can now see, you should ask a number of questions about legal fees and expenses while interviewing lawyers to hire. Here are some questions to ask that should help you get a handle on how much it may cost to file bankruptcy:
- Do you charge by the hour or a flat fee?
- What does your hourly or flat fee include? What is not included?
- What other expenses will I have to pay on top of your legal fee? Can you give me an estimate for them?
- Is there any room for negotiating a lower fee?
- If I pay a flat fee, what are my payment options? Is the fee refundable?
When you get the answers to these questions, you’ll know exactly how much it costs to hire a New York bankruptcy lawyer.
What Are The Benefits Of Hiring A Bankruptcy Lawyer In New York City
Bankruptcy cases come in different shades of complexity. There are also many procedural requirements that, if you mess up on, can cause problems in a case that may lead to dismissal, loss of property, and so on. This is why when doing your bankruptcy evaluation, you want to balance finding an affordable bankruptcy attorney, someone that is an experienced attorney that keeps up with and regularly practices bankruptcy law, and is someone that you feel comfortable and confident working with.
There are stories of people hiring bankruptcy petition preparers. These are not attorneys, and often paralegals or law office assistants that will offer to prepare your case for a really low fee. Keep in mind that bankruptcy petition preparers are not authorized of giving you legal advice, they have no duty to represent or indemnify you, and if something goes wrong in your case, its your problem entirely.
There are also lots of bankruptcy stories Ive seen have a bad ending when someone filed their own case. They didnt understand how the federal bankruptcy exemptions or state bankruptcy exemptions work, and end up losing non-exempt property.
Another common occurrence involves real estate. People not represented by counsel may not properly disclose a prior or current interest in real estate. At the meeting of creditors, the bankruptcy trustee brings up a transfer of real estate that the debtor was part of, and it may be a fraudulent transfer.
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If Youre Looking For Bankruptcy Lawyers In New York City Then Contact The Law Office Of Richard Kistnen Today And Get Your Confidential No
For most people, where theres debt, theres financial stress. The good news is that there are many options available for people who are overwhelmed by their debt and would like to be able to live their lives without being tied to it.
One option is to file for Chapter 7 or Chapter 13 bankruptcy. When you file bankruptcy, you experience debt relief immediately. The Law Office of Richard Kistnen is a law firm that is ready to help you get rid of your debt for good.
We offer a confidential, no-obligation initial consultation with an attorney to discuss your options for filing for bankruptcy. During this consultation, you can learn how bankruptcy can help you get a fresh financial start and what the process involves.
At the Law Office of Richard Kistnen, we offer a free consultation with an attorney to talk about your case. Schedule your consultation today by , or contacting us using the information below!
Hiring A New York Bankruptcy Attorney By The Hour
Whether you are from Brooklyn or Albany or any other part of the state, if you decide to hire an attorney by the hour, you will probably have to pay a retainer fee, which is like a down payment. From then on, you’ll likely receive monthly statements for the hours your lawyer worked on your filing.
New York bankruptcy lawyers who charge an hourly fee typically break down the hour into either 15-minute or 6-minute increments. That may sound like a small difference, but it adds up.
Take, for example, a 5-minute phone call. A lawyer who charges $200 an hour in 15-minute increments will want $50 for that 5-minute conversations, while a lawyer who charges $200 an hour in 6-minute increments will want only $20.
How a lawyer comes up with an hourly fee is based on several factors, including:
- The amount of experience he or she has
- His or her location
- The complexity of the legal matters tended to
- The costs to run his or her law office
Don’t make the mistake of assuming that just because a lawyer charges more, you’ll end up paying more. A more experienced lawyer who charges more may be more efficient, saving you time and money.
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