How Lawerys are paid in Bankruptcy?

[genehuk]

I'd like to understand the way lawyers (representing debtors) compensated in a bankrupcy case.

I know they usually charge 1K - 10K+ for consulting, filing, hearing, etc.

But are these only way to get compensated?

[AZandbroke]

I know I hired an attorney for mine. The tips he gave me are helping us get through this trying time with way less stress.

I paid $100 for the initial meeting and we are working on paying him the total of $1500 for the whole case.

Well worth the cost to us.

[55521]

First, it is their business and they should be paid for their skill. But, it is ILLEGAL for a lawyer to do a free bankruptcy. The lawyer MUST prove to the court, in fact provide proof of payment for services to the court before the case can go forward. Failure to do so will void the filing and subject the lawyer to penalties.

Even if a lawyer wanted to do a free bankruptcy he can't unless he is doing his own. In that case the legal fees are free but he must pay the filing fee. So, they don't just expect to be paid but their hands are tied also, they must be paid. This rule is in place to provide controls on the number of bankruptcy cases each year to prevent overload of the court, and make it harder to file. Funny how you can actually be too broke to file!

How do you know it is illegal for the attorney?

[themig90]

Check online, nowadays there is a plethora of legal aid that can assist you in filing for bankruptcy without hiring an attorney.

[esterlydsl]

Its right that finding a genuine bankruptcy attorney is not an easy thing but for desired results one has to be patient and compare different attorneys on behalf of their fees and past record.

[loanmod]

I think you should consult a person who have already paid for lawyer in bankruptcy...

[filingbankrupcy]

I think you must consult a person who have already paid for lawyer in bankruptcy.

[goairplanes]

It may be possible to get pro bono attorney, although you get what you pay for!

[bileckilawgroup]

I think the lawyer should be paid for their service rendered & some proceeds come out from the sales of assets of the resolvent partner.

[JSchrader]

Full disclosure: I'm a bankruptcy attorney, and so I'm biased.

That said, it seems like this thread has gotten a little off track from the original discussion. Here is how bankruptcy attorneys are typically paid:

Chapter 7 case - Entire fee up front. Unfortunately, the fee can't be paid after the bankruptcy case, because the chapter 7 discharge would technically discharge the attorney's fees.

Chapter 13 case - Typically, some portion of the fee is paid up front, but more is spread over the course of the Chapter 13 plan (3 or 5 years). Sometimes, the attorney will accept nothing down, and spread the entire fee over the plan.

Back to the issue of whether attorneys are affordable. As I previously said, I'm biased. But here is my take on the issue: http://www.inlandempirebankruptcyrel...d-an-attorney/. You can probably tell by the URL what my conclusion is.