If you fire your bankruptcy lawyer, whether or not you can receive a refund of your fees will depend on:
(Learn more about whether you should fire your bankruptcy attorney.)
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:
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).
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:
In many cases, attorneys charge a flat fee to handle your bankruptcy from start to finish. This generally includes:
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 owe can also depend on whether you filed for Chapter 7 or Chapter 13 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:
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.
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: