What The Laws Say About Bankruptcy Attorney Fees?

As per the laws applicable in the United States of America, there are certain rules and regulations that must be followed thoroughly when it comes to bankruptcy attorney fees. The laws require that the payment structure and the amount of the fees must be clearly understood between the debtor and the attorney he/she is hiring. The contract between the two must clearly explain the terms and conditions regarding fees. There must not be hidden clause. The debtors are advised to read the fine prints thoroughly before they sign it. The retainer agreement must also include the description of the types of services that the lawyer will perform for the client and how much those services are going to cost to the debtor. Each and every aspect of the fees must be clearly disclosed in the contract. The most important thing is that everything must be in complaisance with the law (Rule 2016 of the Federal Rules of Bankruptcy Procedure) and thoroughly approved by the court.

About The Basic Fees

As per the laws, in every bankruptcy case, when an attorney is hired by a debtor, there are some basic legal services that they must provide. For this, there are also provisions regarding the basic bankruptcy attorney fees. Some of the basic services include providing suggestions on what kind of consequences the debtor may have to face if their petition for bankruptcy is granted, doing a thorough study and then letting the debtor know which type of bankruptcy they qualify for, and other such things. The lawyer when hired must also prepare the bankruptcy paperwork on behalf of the debtor, such as statement of financial affairs, schedules, petition, and any additional paperwork required depending upon the specific nature of the case they are handling. The bankruptcy petition that file usually contains the details regarding the cost of these services.

Fees For Motions

Additional bankruptcy attorney fees can be charged if the debtor is filing a motion. There can also be an array of situations where the debtor may have to file motions, such as when they have to make some corrections in the bankruptcy forms that have already been submitted, when it is later decided that the petition should be filed under a different chapter, or when the debtor wants to sell a specific property while the bankruptcy case is still in the court. Lawyers are allowed to charge addition fees for the service they provide regarding such motions. There can also be several other situations when additional fees might be applicable, such as when the attorney has to draft motions to ensure the debtor only has to pay the fair current market value of the property or when motions have to be filed to reclassify debts from secured to unsecured.

Contingency Fee

The laws also provide provisions to charge bankruptcy attorney fees on a contingency basis. However, this is usually applicable in only those cases, where the lawyer promises the debtor that they can help them recover a certain percentage of the damage and that if they succeed to do that, they are going to keep a certain percentage of the total recovery as their commission. If they fail to do what they promise, the debtor will not be held responsible to pay any fee at all.

Overall, if you are considering hiring a lawyer for your case, it is very important for you to make sure that you understand the terms and condition regarding the fee payments thoroughly and that you have no confusion regarding bankruptcy attorney fees. The more you are informed about the laws, the better you can ensure protection of your rights and interests.

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