By Dave Kelly, Minnesota Bankruptcy Lawyer<\/p>\n\n\n
I often receive phone calls where the first thing I hear is \u201chow much does it cost to file bankruptcy?\u201d It’s very hard for me to provide a simple answer.\u00a0 Bankruptcies aren\u2019t like cans of beans which I keep here on a shelf already stamped with a price.<\/p>\n
If the caller will let me ask a series of questions so that I can get an idea of what kind of case it would be, then I might be able to suggest what the fee would probably be. If the caller wants a number right away, the conversation usually ends fairly quickly. My fees are not the lowest in the area, and if that\u2019s all someone is looking for, then I\u2019m not the lawyer they want.\u00a0 All I can do in this situation is say “Can I ask you a few questions?\u201d and see if they want to discuss it or not.<\/p>\n
Lawyer fees in bankruptcy are a matter of public record. In every case the petition includes information on what the lawyer has charged. When it comes to Chapter 13 cases, it\u2019s true that there is what is called the \u201cno-look fee.\u201d This is the amount that the judges have agreed a lawyer can charge without having to provide a detailed explanation. In Minnesota this has not gone up for a long time, and I often hear complaints from my colleagues that it is too low. Several lawyers I know make it their policy to provide a detailed billing for every Chapter 13 case so they can go higher than the no-look fee. For many of the more complicated cases, such as a case involving a lien strip, I can certainly see this might be an appropriate thing to do.<\/p>\n
Personally, however, I have always so far just charged the no-look fee. Right now as of the date of this writing, the no-look fee in Minnesota is $2,500 for a below median Chapter 13 and $3,000 for an above median Chapter 13.\u00a0The court filing fee is always additional.\u00a0 BUT in a Chapter 13 part of the lawyer\u2019s fee can be put into the Chapter 13 Plan so that the client does not have to pay it before the case is filed. In most Chapter 13 cases, putting part of the attorney fee in the Plan just means that the creditors get that much less. So from the point of view of my client, the part that goes into the Plan might as well be free. The result is that in most of my Chapter 13 cases, I wind of asking for less before filing than I do in the Chapter 7s.\u00a0 The current court filing fees are $281 for a Chapter 13 and $306 for a Chapter 7.\u00a0 Whatever it is that I’m charging,\u00a0the court filing fee has to be put on top of that.<\/p>\n
For most of the Chapter 7 work that I do, my fees are lower than they are for the Chapter 13s. There\u2019s a good reason for that: in the Chapter 13 case I am responsible for the case for between three and five years. Chapter 7s are over usually in a matter of months. My fees for the Chapter 7s are competitive, but not the lowest in town. I dare not say much more than that without having a specific situation in mind.\u00a0 Every case is so much different from every other case that I’ve never been able to come up with a one size fits all fee schedule. But I\u2019m always glad to discuss my fee with anyone who can take a few minutes to chat about their situation on the phone, and for those chats on the phone I don\u2019t charge a thing.<\/p>\n
I should mention here that there is a counseling requirement that must be satisfied in both Chapter 7 and 13. There is one counseling course that must be done before filing, and another that must be done after filing. That’s two (2) courses that must be done before the process is complete.\u00a0 My clients can go anywhere they want for the counseling, as long as the agency has been approved by the US Trustee\u2019s office. The agency I recommend charges $40 per course if I sign the client up for the course, and $10 more per course if the client goes there on their own. It can be done on line and over the phone without leaving home.\u00a0 I don’t get any sort of commission or referral fee from the counseling people, although they did send me some cookies one Christmas. When you count the before filing and the after filing courses together, this is another $80 of total cost.<\/p>\n
I am not comfortable with filing anything with the court unless I have given it the proper amount of attention, so I know it\u2019s done right and likely to go smoothly. I tell my clients that we are going to do the work in my office before filing the case, so that we don\u2019t have to do a lot of extra work at the courthouse after the case is filed.\u00a0 By the time we get to the hearing, also known as the first meeting of creditors, I want the case to be the most boring and plain vanilla thing the Trustee has ever seen. If the Trustee almost falls asleep during the hearing, I did it right. My clients often say after the hearing, \u201cis that all there is to this?\u201d Most of the time at that point it is all there is, because I did all the sweating over the case before it was filed.<\/p>\n
By the time I get to the courthouse, it is likely that I will have spent as many as 15 hours on a case, sometimes much more than that. I will have had at least four face to face meetings – often many more than that – with my client, probably a couple hours each time.\u00a0 Recently I checked my calendar and found that I had met with one client 11 times before the case was ready to file.\u00a0 A bankruptcy petition has somewhere in the range of 500 questions, and tends to run between 50 and 65 pages in length. These questions are answered under penalty of perjury.\u00a0 An incorrect answer can be a crime for my client.\u00a0 When I sign the petition, I also am certifying that everything in it is correct.\u00a0 I can be sanctioned, perhaps severely, if it\u2019s not. A client asked me recently, after the case was completed, \u201cKelly how can you sleep at night with all this stuff to keep track of?\u201d All I can say is that I sleep better when I know I\u2019ve given it my best.<\/p>","protected":false},"excerpt":{"rendered":"
By Dave Kelly, Minnesota Bankruptcy Lawyer I often receive phone calls where the first thing I hear is \u201chow much does it cost to file bankruptcy?\u201d It’s very hard for me to provide a simple answer.\u00a0 Bankruptcies aren\u2019t like cans of beans which I keep here on a shelf already stamped with a price. If … <\/p>\n