What To Know About Lawyer Fees When Filing For Chapter 13 Bankruptcy

Bankruptcy is a great way to bail you out of your current financial challenges. However, you likely need a lawyer to get you through the process. Here are some things that you need to know about those lawyer fees that you need to pay. 

The Lawyer Fees Can Be Rolled Into The Monthly Payment Plan

While a Chapter 7 bankruptcy is simplified and often a flat fee that is paid up front, Chapter 13 is a little bit different with there being hourly and itemized costs. Because of this, It is common for a lawyer to request some money up front to get the process started. The remaining balance of your bankruptcy lawyer fees can be rolled into your Chapter 13 repayment plan and paid off over time. This helps make the process affordable to you as you go through a financially hard time in your life. 

How much will those upfront costs be? It really depends on the lawyer. Some lawyers may not charge you anything up front and include the entire balance in the monthly repayment plan, while other lawyers may charge you an up front cost. The lawyer could decide this based on if you are currently employed or not, since they would not be worried about the payments towards the repayment plan being made if you have a steady income. 

The benefit of rolling these costs into the monthly repayment plan is that it gives the lawyer an incentive to get the job done. They will be able to easily collect that payment if the bankruptcy is successful and you have a repayment plan set up. If the bankruptcy is not successful, it makes it difficult for the lawyer to collect the fees for their services.

The Amount Of Lawyer Fees Is Regulated And Monitored

Be aware that the fees that you pay to a lawyer to handle your bankruptcy are regulated by the local bankruptcy court. The court sometimes requests that detailed billing and expenses be submitted to the court to review, which has its own administrative costs associated with it. 

However, some courts offer no-look fees, where detailed billing and expenses do not have to be submitted as long as they fall under the state's limit to qualify for no-look fees. If your lawyer fees end up going above that state limit for the no-look fee process, the additional detailed billing and expenses would need to be submitted to the court and have administrative charges associated with them.

For more information, contact a bankruptcy law attorney in your area.