Bankruptcy and Attorney’s Fees

Texas Bankruptcy AttorneyHiring a bankruptcy lawyer is fairly inexpensive compared to other types of litigation attorneys.  Most bankruptcy lawyers will charge between $1,500 and $2,000 for a Chapter 7 bankruptcy case.  Every once in a while I hear of an attorney charging $2,500 to $3,500 for a simple Chapter 7 case, but that is unusual.  These amounts do not include the court filing fee and the cost of pulling a credit report.  Bankruptcy attorneys mostly work on a flat fee system meaning that they agree to file a bankruptcy case for a set amount rather than charging an hourly fee.  Compared to other types of attorneys that may charge $250 to $500 an hour, hiring a bankruptcy attorney is a bargain.

However, when evaluating the cost of hiring a bankruptcy attorney it makes sense to look at it in the context of the situation.  Clients who hire bankruptcy attorneys are having difficulty with their finances which is why they are considering a Chapter 7 or Chapter 13 case in the first place.  For a person struggling with his finances, paying an attorney an average of $100 to $150 an hour can be difficult.

In Chapter 7 cases, attorneys generally require that their clients pay the fee before the case is filed.  The reason for this requirement is that if an attorney collects their fee after filing the case then they are violating the automatic stay.  Debtor’s attorneys are affected by the automatic stay just like other the creditors listed in the case.  Most lawyers will offer a payment plan so that their clients can pay off the case over time.  In addition, once a debtor makes the decision to file a bankruptcy case they will stop paying credit cards, medical bills, and any debts associated with homes or cars they are surrendering which helps the debtor pay off their attorney’s fee and get the case filed faster.

Nathan