Bankruptcy and Attorney’s Fees Continued

Texas Bankruptcy AttorneyIn Chapter 13 cases the majority of the attorney’s fee are paid in the plan.  Debtors usually have to pay a small portion of the fee up front and then the rest is included in the plan and paid by the trustee.  Debtors do have to pay the court filing fee and the cost of a credit report before filing as well.  Chapter 13 cases are much less expensive to get filed but cost more than Chapter 7 cases in the long run.  The standard fee in the Northern District of Texas for a Chapter 13 case is $3,500.  The standard fee is $3,000 in the Eastern District of Texas.

When I refer to the “standard fee” I mean the no-look fee.  In bankruptcy cases debtor’s attorneys in some jurisdictions have to file a fee application with the court asking for their attorney’s fees.  These applications provide a list of work performed in the case with the amount of time spent.  They also include the costs associated with the case, such as postage, copies, etc.  In districts where thousands of Chapter 13 cases are filed each and every year, this requirement can result in alot of wasted time for bankruptcy judges, trustees, and debtor’s attorney, so the courts implemented a no-look fee in their local rules.  This rule basically states that if the debtor’s attorney does not charge an amount above the no-look fee then the court will not require the lawyer to file a fee application.  The trustee can pay them without needing a formal fee application and order of the court.

Sometimes cases are complicated or require extensive litigation.  For example, if the debtor wishes to strip a second lien from their home, pursue an automatic stay violation, or modify their plan after confirmation, then the debtor’s attorney may ask the court for additional attorney’s fees.  These are usually paid through the trustee by increasing the plan base.