Attorney fees in Chapter 13 bankruptcy can vary significantly by state and district. However, most courts have Chapter 13 fee guidelines which can help you determine the average for your area.
If you're interested in reorganizing your debt, you might want to start by learning whether you're eligible to file for Chapter 13 bankruptcy.
Bankruptcy law requires an attorney who files a Chapter 13 bankruptcy to disclose the fees for the court's review and approval. The judge determines whether the amount is reasonable. If the court finds the fee excessive, it can order the attorney to refund all or a portion of it.
Courts don't want to review fees in every case, so most courts have local rules or fee guidelines that set a "presumptively reasonable" or "no-look" fee amount for a Chapter 13 case. Different courts use different terms, but the meaning is the same. If the amount charged by the attorney is equal to or less than the presumptively reasonable or no-look fee, the court will let it stand.
Here are a few other things to know.
The services included in a Chapter 13 bankruptcy flat fee vary by district. In some districts, the attorney is expected to handle everything that comes up without additional charge. In other districts, a lawyer is permitted to charge more as long as the attorney discloses the additional fees to the court.
Before you hire a bankruptcy attorney, you'll want to have a clear idea of what the fee includes.
In Chapter 7 bankruptcy, the lawyer will require you to pay the fee in full before filing the matter. Otherwise, the amount still owed to the lawyer would get wiped out by the bankruptcy discharge—the order that erases qualifying debt.
By contrast, the Chapter 13 fee is often paid, at least in part, with plan payments after the debtor files the case. Although some attorneys might let you pay the entire Chapter 13 fee through the plan, your attorney will likely require you to pay a portion upfront as part of the retainer agreement (you must pay something for the retainer to be binding).
Check the website of the bankruptcy court. You can use the Federal Court Finder tool to find bankruptcy court websites.