How to determine if your lawyer is charging a reasonable rate for your Chapter 7 or Chapter 13 bankruptcy case.
Bankruptcy lawyer fees can vary significantly depending on your individual circumstances. In general, you can determine whether or not your lawyer is charging a reasonable rate by requesting fee quotes from different attorneys in your area and checking if your local bankruptcy court has guidelines that set forth what a reasonable attorney fee should be.
Factors That Affect Attorney Fees
There are many factors that can affect whether or not your attorney’s fees are reasonable. In most cases, how much a bankruptcy attorney will charge depends on:
- whether you want to file a Chapter 7 or Chapter 13 bankruptcy
- the complexity of your case
- whether there are any court-determined fee guidelines in your jurisdiction
- the attorney’s experience level
- the area you live in.
Chapter 7 Attorney Fees Typically Depend on the Difficulty of Your Bankruptcy
If you are filing for Chapter 7 bankruptcy, the difficulty of your case will typically be the most important factor that determines your attorney fees. In general, the simpler your bankruptcy, the less you will have to pay in attorney fees. This means that if you are single, unemployed, and have little or no property, your attorney fees will usually be much less than those of a couple who makes a lot of money, owns a significant amount of assets, and wants to file a joint bankruptcy.
Most attorneys charge somewhere between $500 and $3,500 for a Chapter 7 bankruptcy. But attorney fees can exceed $3,500 if you have a very complicated case. (Learn more about average bankruptcy attorney fees.)
What About Chapter 13 Attorney Fees?
Chapter 13 bankruptcies typically require attorneys to put in more hours of work than Chapter 7 cases. This means that attorneys normally charge more for filing a Chapter 13 bankruptcy. Attorney fees for a Chapter 13 bankruptcy usually range from $2,500 to $6,000 depending on the difficulty of your case and court-set attorney fee guidelines.
Court-determined presumptively reasonable attorney fees. Bankruptcy courts have the authority to review attorney fees and determine whether or not they are reasonable. Because most judges don’t have the time to review attorney fees in every bankruptcy case, many courts have established guidelines that set forth fee amounts that they consider to be presumptively reasonable (these guidelines are generally more common in Chapter 13 bankruptcy). Your bankruptcy lawyer can charge more, however, if he or she gets approval from the court.
You can often find the Chapter 13 fee guidelines on your local court's website or on the website of your court's standing Chapter 13 bankruptcy trustee. You can use the Court Locator tool on the U.S. Trustee’s website to find bankruptcy court websites.
Paying your Chapter 13 attorney fees through your repayment plan. Most debtors can’t afford to pay all of their Chapter 13 attorney fees upfront. Luckily, Chapter 13 bankruptcy allows you to build all or a portion of your attorney fees into your Chapter 13 plan. But it’s up to you and your attorney to negotiate how much of the total fee you must pay upfront before he or she will file your case. (Learn more about the Chapter 13 repayment plan.)
What if You See an Advertisement with Lower Attorney Fees?
Some bankruptcy attorneys have advertisements that claim extremely low fees. These advertisements sometimes lead debtors to question whether or not their attorneys' fees are reasonable. In general, keep in mind that most attorneys will advertise their lowest fees.
While these fees may be accurate for a single debtor filing a no-asset Chapter 7 bankruptcy, you typically will have to pay more if your case is more complicated. For this reason, it’s always a good idea to make an appointment and consult with the attorney in person to learn how much he or she will charge to take on your case.
Shop Around and Compare Attorney Fees in Your Area
Bankruptcy attorney fees can also vary depending on where you live and how much experience the attorney has. When looking for an attorney, request fee quotes from several different lawyers in your area to compare their fees.
Generally, the more experience an attorney has, the higher his or her fees will be. If you have a relatively easy bankruptcy, you may not need to pay that extra premium to retain a lawyer with several years of experience. But always make sure that the attorney you hire has experience with and is capable of handling the type of case you have. (Learn more about how to find a good bankruptcy lawyer.)