Expert: Terry Leeders - 4/16/2008

Question
QUESTION: Terry,

Considering either a Ch 7 or Ch 13. An attorney I spoke with stated that his fees (not court costs or filing fees) would have to be paid up front as a result of the new laws enacted in 2005. Said that I'd have pay his full $1,800 fee before he could even file, since the law requires him to show that he's been paid. Is this true?

Know any good BK lawyers in PA?

Thanks,
Steve

ANSWER: In Illinois, the case law says that Chapter 7 fees are discharged if not received up front. Chapter 13 fees can be rolled into the payment plan.  This sounds about right.

---------- FOLLOW-UP ----------

QUESTION: Terry,

Does your answer mean that the payment of attorneys fees for a bankruptcy case are driven by the laws of the state in which one lives? For example, we live in PA. Is it possible that PA law differs from IL law in how attorneys fees are handled?

I guess the bottom line is that I wasn't sure if I was being told something that was true, or just that he wanted to be paid up front, and simply stated that the law required him to collect his fee in advance of filing.

Answer
I charge fees for Chapter 7 based on the complexity of the case.  There is no limit.  In Illinois, we receive Chapter 7 fees up front before filing.
Chapter 13 fees are governed by the court, with each jurisdiction usually having a cap, and having the attorney get approval for the fees by motion in your case.