If I Fire My Bankruptcy Attorney, What Fees Will I Owe?
If you fire your bankruptcy lawyer, you may be able to get a refund of attorney's fees that are excessive or for work that your lawyer has not yet done.
If you fire your bankruptcy lawyer, whether or not you can receive a refund of your fees will depend on:
- the terms of your retainer agreement (the contract you sign when you hire an attorney)
- the rules of your state bar association
- how much work the attorney has performed, and
- whether you filed for Chapter 7 or Chapter 13 bankruptcy.
(Learn more about whether you should fire your bankruptcy attorney.)
What Are the Terms of Your Retainer Agreement?
In most cases, when you hire a bankruptcy lawyer, you will sign a contract called a retainer agreement. The retainer agreement will often set forth:
- the rights and responsibilities of the attorney and the client
- the scope of the work the attorney must perform
- the attorney’s fee, and
- what happens if the attorney-client relationship ends.
Your retainer agreement probably includes provisions that address what happens to your fees if you fire your lawyer. For this reason, it’s a good place to start when determining whether or not the attorney must refund some or all of your fees.
Keep in mind that the retainer agreement may list some attorney fees as nonrefundable. But this doesn’t necessarily mean that you can’t get them back. Even if your retainer agreement lists your attorney’s fees as nonrefundable, your state bar association’s rules may not allow the attorney to keep unearned or excessive fees (discussed below).
Review the Rules of Your State Bar Association
The state bar association is the organization that regulates the professional conduct of attorneys. All state bars have rules of professional conduct that attorneys must follow. In most cases, these rules prohibit attorneys from keeping unearned or excessive fees. Even if your retainer agreement states that the fees you paid are considered earned upon receipt or labeled as nonrefundable, your attorney isn’t entitled to keep those fees if they are excessive or unreasonable.
Whether an attorney’s fees are excessive or unreasonable depends on many factors including:
- how much work the attorney did
- the difficulty of your case
- the length of the attorney-client relationship, and
- the amount of fees you paid.
Has the Attorney Filed Your Bankruptcy Case?
In many cases, attorneys charge a flat fee to handle your bankruptcy from start to finish. This generally includes:
- preparing your bankruptcy paperwork
- filing your case
- representing you at all required hearings such as the meeting of creditors (also called the 341 hearing), and
- making sure that you receive your bankruptcy discharge.
If your attorney has not filed your bankruptcy case, whether or not you are entitled to a refund of some or all of your fees typically depends on:
- the amount of fees you paid, and
- how much work the attorney has done so far (for example, your attorney may have already spent a significant amount of time preparing your bankruptcy paperwork).
Did You File for Chapter 7 or Chapter 13 Bankruptcy?
The amount of fees you owe can also depend on whether you filed for Chapter 7 or Chapter 13 bankruptcy.
Attorney Fee Refunds in Chapter 7 Bankruptcy
In general, bankruptcy attorneys won’t file a Chapter 7 case until you have paid all of your fees in full. (Learn about average Chapter 7 attorney fees.)
If you fire your lawyer after he or she files your Chapter 7 bankruptcy, the amount of fees you may be entitled to get back will usually depend on:
- how far along the case is, and
- whether your attorney has provided competent representation (done everything he or she was supposed to) up to that point.
Attorney Fee Refunds in Chapter 13 Bankruptcy
In Chapter 13 bankruptcy, you typically don’t have to pay all of your fees in full before your attorney files your case. Many attorneys will require a certain portion of the total fee upfront. But the remainder is paid through your Chapter 13 repayment plan. (Learn about paying your attorney fees through your Chapter 13 plan.)
You must start making Chapter 13 plan payments shortly after filing your case. But the bankruptcy trustee doesn’t distribute your payments to your creditors (including your attorney) until the court confirms (approves) your plan and your attorney’s fees.
If you fire your attorney before the court confirms your bankruptcy, the trustee won’t pay the remainder of your attorney’s fees without a court order. But keep in mind that depending on the amount of work your attorney has performed, he or she may file an application with the court to receive the remainder of the fees.
What Can You Do If Your Attorney Doesn’t Refund Unearned Fees?
If you fire your bankruptcy attorney, you can often negotiate the amount of fees he or she will get to keep. But if your lawyer refuses to refund the unearned or excessive portion of his or her fees, you can:
- sue the attorney in small claims court, or
- report the attorney to the state bar for disciplinary action.