Chapter 13 Bankruptcy: More Affordable Than You Think

Chapter 13 Bankruptcy is Complex, But Can You Afford a Lawyer?

Chapter 13 bankruptcy is a complicated process which usually requires the help of an attorney. A recent study out of the Central District of California found that just 1 in 2,500 pro se chapter 13 cases in that district were successful. Why?

The forms and rules are complex and small mistakes have big consequences. An experienced attorney can help smooth the difficult process and minimize your stress. Of course, attorneys also have costs, and when you’re filing for bankruptcy you probably think that another bill is the last thing you need. Many folks we talk to don’t believe they’ll be able to afford bankruptcy, but they’re usually wrong. Bankruptcy attorneys understand that their clients are facing financial hardship, so does the court.

Chapter 13 is More Affordable Than You Think

It turns out that when filing for Chapter 13 bankruptcy, an attorney might be more affordable than you think. Instead of paying the entire fee upfront or in a balloon payment at the end of the bankruptcy process, you can include attorney fees in your Chapter 13 repayment plan and pay lawyer’s fees in installments as part of your bankruptcy.

When filing for Chapter 7 bankruptcy, attorneys will likely require full payment of fees prior to filing a case. This is not the case in chapter 13 bankruptcy, which allows the bankruptcy trustee to pay the attorney’s fees out of the bankruptcy estate each month. That means that not only can you pay your bill over time but you don’t have to deal with it separately at all. By default, the plan payments are subtracted from your paychecks (you may be able to set up a different method of payment with your trustee) and deposited into the bankruptcy estate. The trustee then makes distributions to creditors, including your attorney, every month.

Fee Structures Vary Based on Locale and Case

The “no-look” fee in Dayton for chapter 13 bankruptcy is $3,500. Your attorney may implement several different fee structures to pay this bill. For example, you may need to pay a small part of the fee up front. On the other hand, you may only be responsible for filing fees to initiate a case. The length of time over which the fees are repaid will vary based as well, but in the vast majority of cases, lawyer’s fees are paid as part of the Chapter 13 plan.

The way you pay your fees will depend on several factors, including the lawyer’s, judge’s, and trustee’s policies, the feasibility of your case, and local custom. If you feel that your attorney fees have been assessed incorrectly, you may have them reviewed by a judge.

Ask your attorney about fee structure and repayment plans. Legal help for the Chapter 13 process is more affordable than you think.

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