shoeguy

Fee structures Chp7 vs Chp 13

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I'm sure there are tons of differnet fee structures out there and they vary by state and attorney. I'm trying to get some idea of a figure so I can judge if the attorney I meet is in the ball park.

I'm familiar with filing fees extra but then is it an hourly rate?

Aslo one more quick question while I ahve your eyes. Is there any reason the you can not file Chp 13? Not passing the means test throws you out of Chp 7 but anything for Chp 13?

Just gettng a little nervous. i have my intital consultation tomorrow.

Thanks

Shoeguy

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The way it worked with my attorney was a flat charge of $2300.00 (plus the FF) for a chapter 7, and a fee of $3400.00 for a chapter 13 with $1500.00 up front and the rest paid through the trustee distribution. We filed chapter 7. As far as not being eligible to file a 13, I don't know. I don't see why not, unless you're sitting on a pile of gold bullion.

One thing I can guarantee is there is NO attorney in the solar system that will file a chapter 7 without getting every nickel up front.

They have some serious trust issues...

Edited by workingpoor
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I assume it depends on different states.

The attorney I spoke with (FL) said it would cost me $1,500 for Ch 7, $3,500 for Ch 13. I don't remember any specifics on payment plans etc, but I think he said the Ch 7 would have to be paid up front. I was too busy asking other questions, and going over my finances with him. I think I remember him saying something about that he couldn't charge more, because of something or rather..lol. At any rate, I'm saving every penny that I can, to hopefully have $1,500 saved up one day...8-)

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I'm sure there are tons of differnet fee structures out there and they vary by state and attorney. I'm trying to get some idea of a figure so I can judge if the attorney I meet is in the ball park.

I'm familiar with filing fees extra but then is it an hourly rate?

Aslo one more quick question while I ahve your eyes. Is there any reason the you can not file Chp 13? Not passing the means test throws you out of Chp 7 but anything for Chp 13?

Just gettng a little nervous. i have my intital consultation tomorrow.

Thanks

Shoeguy

You may be denied the right to file a Chapter 13 if you exceed dollar limits.

From 109 of the code:

(e) Only an individual with regular income that owes, on the date of the filing of the petition, noncontingent, liquidated, unsecured debts of less than $250,000 [$336,900] and noncontingent, liquidated, secured debts of less than $750,000 [$1,010,650], or an individual with regular income and such individual’s spouse, except a stockbroker or a commodity broker, that owe, on the date of the filing of the petition, noncontingent, liquidated, unsecured debts that aggregate less than $250,000 [$336,900] and noncontingent, liquidated, secured debts of less than $750,000 [$1,010,650] may be a debtor under chapter 13 of this title.

[Dollar amounts in this paragraph are adjusted on April 1 every 3 years by section 104. Adjusted amounts for 4-1-07 are in brackets.]

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Our regular rates are $1900 for a Chapter 7 filing + $306 filing fee. For a Chapter 13, it is $1900 upfront + $281 filing fee, but then there is another $1100 in fees buried into a below-median case and another $1600 in legal fees in the plan if the case is above-median. Those Chapter 13 fees buried into the plan are set like that because that is the "no look" fee cap imposed by the federal court to avoid attaching proof of work to the attorney fee application when we make our claim to get paid upon confirmation (ie: $3000 total for below and $3500 for above). OT, but keep in mind that the debtor gets a full refund of all payments (less the 9% the trustee keeps) if the case gets dismissed prior to confirmation. That means the back end legal fees are fully refunded and the lawyer is screwed- we confirm 90% of the time.

Regarding Chapter 13, there are many reasons why a Chapter 13 is not feasible. You can file it but you may not get it confirmed. The biggest reason is that there are two major requirements that in many cases lead to dismissal prior to confirmation: 1) all priority debt and secured arrears MUST be fully paid up through the plan within 60 months, and 2) the total amount of payments (ie monthly payment x 60) must give unsecured class of creditors AT LEAST as much as they would get if you filed a Chapter 7, so non-exempt equity typically bumps payments up significantly UNLESS it is a 100% payout to unsecured. If it is a 100% payout plan, then that must be stated in the plan. The two rules above aren't exhaustive, but the trustee WILL object and WILL dismiss your case if your plan payments don't comply with these rules- complying with these rules sometimes requires payments too high for the debtor to handle. If that be the case, then its best not to let the plan confirm. Drag it out and then convert or modify the mortgage if need be (onot sure what OC's onjective in BK is).

Edited to add: you are correct in that there are caps imposed on unsecured debt limits (approximately $300k). You can still file it, but the trustee will bring a motion to dismiss. Sometimes you can get "creative" to get the #s below $300k, other times the debtor is screwed. If this $300k issue is a problem and the debtor is eligible for a Chapter 7 but wants to file a Chapter 13 because they have mortgage arrears, then file the Chapter 7, obtain the discharge and case closure, then immediately file Chapter 13 (slang for this is Chapter 20). You'll dump the unsecured debt and become eligible for a non-dischargeable 100% Chapter 13 plan to allow you to get caught up over 60 months.

Hope this helps-

Edited by jq26
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One thing I can guarantee is there is NO attorney in the solar system that will file a chapter 7 without getting every nickel up front.

I met with two different attorneys who both offered to file my Chapter 7 bankruptcy before I finished paying them their fee. The one I hired did file it for me, after I made only one payment of a couple hundred dollars. I'll be making one payment per month over the coming months, until the rest of the attorney's fee is paid.

Not a matter of trust. I think the law requires all attorneys fees paid before filing a chapter 7.

That may be true in some states, but not all. It probably is somewhat rare to find an attorney who will file before being paid their full fee, but in the states where that is allowed, these attorneys do exist.

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I'll be making one payment per month over the coming months, until the rest of the attorney's fee is paid.
Did the attorney list himself on Schedule F as an unsecured creditor? Did he list the amount actually paid and not owed on the attorney compensation disclosure page?

I know attorneys do this. I just think it is playing with fire (and bad business). I also think it creates an inherent conflict of interest. Bankruptcy is inherently adversarial between debtor and creditor. Your attorney that is carrying a balance is playing both sides of the fence.

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