Can I Pay My Bankruptcy Lawyer in Installments?

If you can't pay your bankruptcy attorneys' fees all at once, you might be able to make the payments in installments. But whether your bankruptcy lawyer will file your case with the bankruptcy court before or after you pay the entire fee will depend on the bankruptcy chapter you intend to file.

For instance, paying your lawyer's bankruptcy legal fees in installments after your lawyer files your Chapter 13 case is common, but it won't happen in Chapter 7. Although most attorneys will allow clients to pay Chapter 7 attorneys' fees in installments, a bankruptcy lawyer won't file your Chapter 7 case until you've paid your bankruptcy retainer in full. Find out why.

Attorneys' Fees, Court Costs, and More

When you hire an attorney to represent you in bankruptcy, you should plan to pay three amounts:

• the attorneys' fees the lawyer charges to advise you, complete your bankruptcy paperwork, and represent you at bankruptcy hearings
• the bankruptcy filing fee you'll pay to the court to file the bankruptcy paperwork, and
• the cost of a prebankruptcy credit counseling course.

Depending on where you live and the complexity of your case, it wouldn't be unusual to pay $2,000 for a Chapter 7 case and $3,500 for Chapter 13.

For more information on Chapter 7 and Chapter 13 fees and costs, read Chapter 7 Bankruptcy: What Will It Cost and Will It Wipe Out My Debts or Chapter 13 Bankruptcy: What Will It Cost and Will It Work?

Paying the Bankruptcy Court's Filing Fee in Installments

Filers can pay the Chapter 7 filing fee in up to four installments, and the court will approve most installment requests. Chapter 7 filers qualify for a fee waiver if their income doesn't exceed guideline limits.

Fee waivers and installment payments aren't available in Chapter 13 cases, primarily because Chapter 13 is intended for higher-income filers.

Paying Chapter 7 Attorney's Fees in Installments

Many Chapter 7 bankruptcy attorneys will allow you to pay your fees through an installment plan. You'll make your payments according to the agreed-upon schedule. The attorney will file your case once you've paid the entire amount.

However, don't expect your lawyer to file your bankruptcy paperwork beforehand. Any money owed when you file your case will get "discharged" or eliminated with other qualifying debt. Once the Chapter 7 case gets filed, the attorney can't take any steps to collect the balance owed.

Learn about options if you can't afford a Chapter 7 bankruptcy lawyer.

Paying Chapter 13 Attorneys' Fees in Installments

In a Chapter 13 case, you'll likely pay a deposit but not the entire legal fee before the lawyer files your case. Chapter 13 lawyers can allow you to pay the remainder through your Chapter 13 repayment plan payments. You'll pay your monthly Chapter 13 payment, and the Chapter 13 trustee responsible for your case will forward the portion for your legal fees to your lawyer.

When you pay your bankruptcy attorney's fees through the Chapter 13 plan, most of the plan payments made at the beginning of a Chapter 13 case will go toward paying the attorneys' fees. Once paid, the Chapter 13 trustee will begin distributing your monthly payments among your other creditors.

If your case gets dismissed before your lawyer's fees are paid, your lawyer won't receive total compensation. Why does this matter? Because your lawyer's belief in your ability to complete your plan will likely be a factor when determining the deposit amount you'll be required to pay.

Meet With the Bankruptcy Attorney

The simplest way to determine the payment arrangements available is by contacting the bankruptcy lawyer directly. Many offer a free initial consultation or will credit the initial consultation fee toward your bankruptcy if you retain the lawyer.

Need More Bankruptcy Help?

Did you know Nolo has made the law accessible for over fifty years? It's true, and we want to ensure you find what you need. Below, you'll find more articles explaining how bankruptcy works. And don't forget that our bankruptcy homepage is the best place to start if you have other questions!

We wholeheartedly encourage research and learning, but online articles can't address all bankruptcy issues or the facts of your case. The best way to protect your assets in bankruptcy is by hiring a local bankruptcy lawyer.