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The Answer to this question is "yesterday." As soon as you are merely thinking the word "bankruptcy," you should also be thinking about which bankruptcy attorney you are going to call to discuss your best options. Most bankruptcy attorneys and law firms provide some type of free initial consultation to basically diagnose your legal problem. Bankruptcy cases present a myriad of legal issues and often lots of little problems that must be identified and worked through. There are some cases where what initially appears to be a "little problem," is actually a big, complex legal problem. The job of a bankruptcy attorney is to meet with the client and thoroughly walk through the client's assets, income, debts, transfers of property ( sometimes going back ten years in the case of a Trust), lawsuits, probate estates, inheritance, family situation, business assets, business liabilities, business transactions, etc. In sum, the bankruptcy attorney really cannot tell you what the case will actually cost in terms of legal fees without first meeting with you and figuring out what your case is all about.
Chapter 7 Legal Fees
In the majority of individual Chapter 7 cases where there are no complex business or investment real estate issues to deal with, the attorney can usually quote the client a base legal fee for representation in the case. The attorney must be paid for the defined standard legal fees for the case prior to the case being filed, and should enter into a written Attorney Fee Agreement with you. The Attorney Fee Agreement will itemize the services the Attorney is going provide in your case, and the corresponding legal fee due prior to case filing. If the attorney does not collect these legal fees prior to filing the bankruptcy case, the legal fees will be discharged along with all of the other pre-bankruptcy debts. There are instances where unforeseen circumstances require payment of legal fees after the case is filed, as spelled out in the Attorney Fee Agreement, and these legal fees can be collected by the Attorney because they are post-filing legal fees not included in the standard services determined prior to the filing of the case.
Chapter 13 Legal Fees
In Chapter 13 Cases, the attorney can put some or all of your attorney fees into the Chapter 13 Plan. It is not uncommon for the Attorney to require a small retainer fee ( usually $500.00 to $800.00) in a standard non-business / non-real estate Ch 13 case, to cover the cost of preparing the case documents and services prior to the Plan being confirmed by the Court. Our firm will usually consider a $0.00 down Chapter 13 filing with all fees paid inside the plan as long as the client has a long term job with wages that will ensure funding of the Plan. If the client has a more "high risk" work history ( meaning a case where a job was just recently started with a long period of unemployment, high expenses, or semi-reliable income), a small retainer fee to secure costs of preparing the case will be needed up front.
If you have questions about the costs of filing a bankruptcy case, please, CALL me, I'll BE there for you.