How Much Does It Cost To File A Chapter 13 Bankruptcy?

calculating Chapter 13 bankruptcy attorneys fees

 

There is no cut and dry to the question how much does is cost to file Chapter 13 bankruptcy. Despite the fact that Chapter 13 bankruptcy attorneys fees may vary greatly by state and by district, majority of courts have guidelines for Chapter 13 fees which may assist you to determine the average fees for your area.

How Do I Know That My Chapter 13 bankruptcy fees are reasonable?

In terms of the bankruptcy law, attorneys who file Chapter 13 bankruptcies are obliged to disclose their fees for the courts review and approval. Irrespective of the agreement between yourself and your attorney, the judge has the right to consider the fee agreement to decide whether the amount claimed is reasonable. Should the judge find that the fee is unreasonable, he or she may order the attorney to refund all or a portion of the fee. Also see Cheap Bankruptcy Attorneys.

What Are Chapter 13 Bankruptcy Presumptively Reasonable or “No-Look” Fees?

As a result of time constraints of having to review fees in every case, the majority of courts have local rules or fee guidelines which set a “presumptively reasonable” or “no-look” fee amount for Chapter 13. While these terms may vary amongst courts, the meaning is the same. Usually a court will not review fees if the amount claimed by the attorney is equal to or less than the presumptively reasonable or no-look fee.

  1. Review is still allowed

The guidelines or local rules, however do not take precedence over the bankruptcy law. Thus, if the circumstances of a case warrant review, a court may still review a fee which does not exceed the presumptively reasonable amount. For example, if an attorney was incompetent and due to his or her lack of      knowledge of Chapter 13 failed to file a confirmable plan, it is highly probable that a court would order a refund even with respect to a no-look fee.

  1. Most attorneys conform with the guidelines

Court reviews may be expensive and time consuming, therefore most  attorneys set their fees based upon the court’s guidelines to avoid reviews. Since most Chapter 13 cases are quite similar, they are amenable to these types of fee guidelines. The similarity amongst Chapter 13 cases lies in the   fact that bankruptcy law imposes debt limits on Chapter 13 cases. Many complex bankruptcy cases exceed the debt limit for Chapter 13, thus they are not filed under the chapter.

  1. Higher fees are permitted, however, review is required.

The amount of work an attorney has to put in varies from case to case, accordingly some cases may require more work than others. In these circumstances, the fee guidelines generally do not preclude an attorney from     charging a higher fee. In the event that an attorney charges a higher fee, he or she would have to follow the procedure set for his or her specific court to have   the fees reviewed and allowed, justifying by way of information presented to     the court as to why a higher fee was charged

What Services Are Included In Chapter 13 Bankruptcy Attorneys Fee?

This also varies by district. While in some districts, an attorney is required to handle everything that comes up without an additional charge, whereas in others, an attorney may be able to charge an additional fee provided the attorney discloses to the court when he or she is charging the additional fee

Additional services may include: defending motions by secured creditors for relief from stay (to continue with foreclosures or repossessions) and repayment plan modifications. Thus, it is useful to understand before you instruct an attorney, what the fee does and does not include.

Also see: Chapter 13 Bankruptcy – Why You Should Hire A Bankruptcy Attorney?

Can I Pay My Chapter 13 Bankruptcy Attorneys Fees Through The Chapter 13 bankruptcy payment plan?

Whereas in Chapter 7 cases, the fees are usually paid before the case is filed, the fees for Chapter 13 is often paid, at least in part through the payment plan after the case is filed.

While some courts allow the entire Chapter 13 bankruptcy attorneys’ fee to be paid through the plan, other courts limit this amount. In the event that your court limits the amount that may be paid through the plan, your attorney may require the difference to be paid up front before the case is filed.

How Do I Find Chapter 13 Bankruptcy Attorneys Fees For My District?         

You may find links to your courts local rules and guidelines pertaining to Chapter 13  bankruptcy attorneys fees on their website. Several Chapter 13 trustees also have websites containing this information apart from other information for Chapter 13 filers.

Generally, Chapter 13 cases are assigned to only one or two standing trustees in each district. Contact your local bankruptcy court and they should be able to provide you with the names of the Chapter 13 trustees and their websites.

What Are The Average Chapter 13 Bankruptcy Attorneys Fees?

A study that was based on data obtained from 2005 and 2009 suggests that the average fee for a Chapter 13 bankruptcy was $2,564 nationwide. However, when broken down by state, the average fee was as little as $1,500 in North Dakota and as high as $4,950 in Maine. The current position is that fees ranging from $2,500 to $5,500 are regarded as ordinary, depending on your location.

The Chapter 13 bankruptcy attorneys  fees for the state of New York is $4,100.

 

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