Before moving ahead with a major financial decision like a bankruptcy filing, consumers understandably want to know how much it will cost. Unfortunately, there is no easy answer.
Here’s a bit of advice: If you’re looking for someone to hire, run away from any attorney who quotes a fee for a bankruptcy without first learning the specifics of your situation. Without knowing how complicated your case may be or which Chapter of the Bankruptcy Code can best suit your individual needs, the attorney simply cannot
make a reasonable estimate regarding the legal fees. There is no such thing as a routine or simple bankruptcy case. Every case is different and they each have their own challenges
The attorney that quotes a fee without knowing anything about the potential case either (1) overcharges some clients by quoting the amount he would charge for the most complicated case, or (2) doesn’t know enough about bankruptcy to understand the possible complications that can arise. Either way, he isn’t the attorney you want to hire.
Think of it this way: if I call my mechanic and ask how much it will cost to fix my car, is he going to quote a price without knowing what’s wrong with the car? Of course not. If he did, I’d look for another mechanic immediately. The competent mechanic is going to get some information about the car before quoting a price to fix it, either by looking at the car or asking questions over the phone.
By the same token, the competent attorney needs information about your finances before quoting a fee for fixing any problems. If you’re intent on getting a firm fee quote for a bankruptcy over the phone, here are some questions you’ll need to answer:
How do you know that bankruptcy is your best debt-relief option?
- How do you know that Chapter 7 is better for your situation than Chapter 13?
- Do you have any nondischargeable debts?
- Do you have any assets with values above the available exemption limits?
- Which exemption scheme will you be using?
- Is your annualized current monthly income above or below the median in your state for your household size?
- Will the presumption of abuse arise in your case? If so, will you be able to rebut it?
- Would a lien strip be possible or helpful in your situation?
>As you can see, there are many variables involved in setting legal fees for a bankruptcy. And very few attorneys are going to take the time to gather all of this information over the phone.
The best way to find out how much your case will cost is to talk to a lawyer. Many will give you a range of fees over the phone. For example, I tell prospective clients that budgeting anywhere from $1500 to $2250 for a Chapter 7 will likely be in the ballpark, but that their specific case may cost more or less. I can quote a fee after we’ve had a meeting and I’ve had a chance to learn about the client’s financial situation. Many lawyers also offer free initial consultations. Others charge a nominal amount for a brief meeting and an assessment of the case. Regardless of individual policies regarding consults, no attorney will file your case without having you sign a fee agreement. Therefore, you’ll know exactly how much your case will cost before you commit to anything.
This guest post was written by Bret Nason, a consumer bankruptcy attorney in Wisconsin.