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You may be thinking of filing for bankruptcy, and you don’t know what you’ll be getting as attorney and filing fees. In reality, the cost of the bankruptcy lawyer may be one of the biggest concerns people have when filing bankruptcy. Fortunately, we have made an analysis of some data points. We can make a breakdown of 5 main factors that determine how bankruptcy attorney fees are determined. 

Understanding Bankruptcy Attorney Fees

The main purpose of writing this article is to provide the variables that determine what an attorney charges as bankruptcy fees in your location. To estimate your attorney fees, tap on the above button, or estimate it here

Let’s delve straight into it. The following is what determines how much you pay as attorney fees: 

  • Type of bankruptcy 
  • Your location of residence
  • The expertise of the bankruptcy attorney 
  • The complexity of the bankruptcy case 
  • The amount of connection involved in the bankruptcy case

To estimate the bankruptcy cost and fees in your area—I’ll advise that you use our bankruptcy attorney cost estimator. Let’s go into more details of each point.

1) Chapter 7 or Chapter 13 Attorney Fees

The type of bankruptcy goes a long way in determining what you’ll pay as attorney fees. 

Generally, Chapter 7 bankruptcy is usually faster to get a discharge from than other types of bankruptcy. This is so because a bankruptcy discharge is always issued within the first 90 days of filing for bankruptcy. Chapter 7 bankruptcy is a less complex type of bankruptcy; as such, it requires little commitment from the bankruptcy attorney—which makes it less expensive. 

A Chapter 13 bankruptcy in Florida is described as a “wage earners” bankruptcy—this means that you may still be asked to pay off some parts of the debts. As such, this bankruptcy is often more complex and requires more time from the attorney, which makes it more expensive than others. Although most times, attorney fees are part of the Chapter 13 bankruptcy payment plan. 

In addition, the majority of bankruptcy courts schedule presumptively reasonable fees that a lot of legal practitioners charge. 

2. The complexity of the bankruptcy case 

Chapter 7 and Chapter 13 cases have their own variability of complexity. Let’s delve into the complexity of each case: 

Chapter 7 bankruptcy below median income 

A means test is a tool that can help you to determine where you’re eligible for a Chapter 7 bankruptcy discharge or not. The government uses Census Bureau Administrative Expenses Multipliers and IRS data to complete the means test. The applicant will have to fill the bankruptcy form 122 to complete the means test.

What it means is that one sure way to qualify is to have an income that is below the median income of your state of residence. Check the bankruptcy income limits by state. You can also use the Chapter 7 calculator below that considers the income limits in your state.

After filling the bankruptcy form B122A-1 and 122A-2, it’s possible that you qualify. Generally, attorneys find it easier to file for this type of bankruptcy if you earn below the median income of your state. This reflects in the total sum of the bankruptcy. 

Chapter 7 bankruptcy above median income

You can qualify for a Chapter 7 bankruptcy discharge if you earn above the median income of the state, but your disposable income must be below a certain figure. 

You will be asked to fill Form 122A-2 if your income is above the median income. And since the process of determining if you qualify for Chapter 7 bankruptcy becomes more complicated if you earn above the median income of the state, it will take more of the attorney’s time, which will lead to a higher cost. 

Chapter 13 Bankruptcy Attorney Fees

The period between filing for a Chapter 13 bankruptcy discharge, and getting an actual discharge usually varies between 3 and 5 years. Also, the process of determining what the plan payment should be is a very complex one. For example, someone with child support in arrears may be confused about how Chapter 13 deals in that aspect. There are also some logistics that the attorney needs to cater to with respect to the period of the case. 

3) Your location may dictate the bankruptcy lawyer fees

The location where you’re filling for a bankruptcy discharge is very important. For example, per Pacer, an area within your state can charge as high as $2000+, while another area may charge less than $1500 for the same Chapter 7 bankruptcy. 

The discrepancy is very evident across the United States, so it shouldn’t be a surprise that it also exists in your state as well.

4) Level of attorney connection

It is possible that you see ads for low-cost bankruptcy options, and you’re curious about why an attorney gave you a bill higher than that amount. This answer lies in the fact that there are two types of firms handling bankcruptcy cases.

Full-Service Bankruptcy Firm:

A full-service bankruptcy law firm based in the State of Florida will provide both the initial consultation and a highly trained paralegal or an attorney. You have the opportunity to have multiple engagements with the attorney, who will be fully available to answer any question you have. He/she will also file for bankruptcy and be with you throughout the process. The attorney can show up for your 341 meetings of creditors. 

Since each time an attorney spends with you is charged, a full-service firm is definitely priced more expensive than bankruptcy mill, which we will elaborate on below. 

Bankruptcy Mill:

The American Bankruptcy Institute describes the bankruptcy mill as a high volume law practice that is engaged in aggressive advertising but provides poor legal services to its clients. Is this generic to all bankruptcy mills? Not necessarily, but this is a simple summary of what they mostly do. 

Most times, when you approach a bankruptcy mill, the staff that will attend to you will be a non-attorney staff, e.g., a salesman. There is usually minimal contact with the attorney, and the attorney hardly shows up for 341 meetings. The main aim of firms in this category is to provide a high volume of half-baked legal services at a low cost. The law firm prizes the bankruptcy lower because the attorney only spends minimal time on a case. 

5) Bankruptcy attorney expertise may indicate fee amount

When you look at the bankruptcy forms, you’ll realize that there is a bit of complexity and technicality involved in filing the bankruptcy form. It’s true that the majority of the filling process will be done on the form, but having a certain level of expertise may be helpful. 

For example, a bankruptcy attorney with experience in filing all types of bankruptcy due to decades of practice and proper knowledge of the law will definitely charge more than an attorney who is learning on duty. Also, a board-certified attorney will charge more because the demand for them is high. 

Estimate the bankruptcy attorney fee in your area

Since you now have the proper knowledge of what goes into the fees, you may have an interest in estimating the exact figure that the fee will be in your area of residence. One effective tool that can help you achieve that aim is our free bankruptcy calculator that can also you do the following: 

  • Uses your zip code to know your area of residence
  • It estimated your Chapter 7 qualification by using the means test 
  • It estimates your Chapter 13 plan payment for you to be able to compare both options
  • Compares other alternatives, such as debt management, debt payoff planning, and debt settlement. 

Post Author: Ben Tejes

Ben Tejes is a co-founder and CEO of Ascend Finance. Before Ascend, Ben held various executive roles at personal finance companies. Ben specializes in Chapter 13 Bankruptcy, Debt Settlement, Chapter 7 Bankruptcy and debt payoff methods. In his free time, Ben enjoys spending time going on adventures with his wife and three young daughters.

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