The main concern of many clients when undertaking legal action is, “how much will this cost me?” It is no different in bankruptcy court. Initially your chapter 7 legal fee is a set amount.
United States Trustee (UST) Information Requests
There are events that can cause additional fees. Most commonly they involve demands by the United States Trustee for information, clarification, and documentation of numbers in your bankruptcy petition and means test.
When I receive a UST letter on a case I forward it to the client immediately. Anything I do not already have is specified to expedite processing. There is always a very small window to answer. It’s the additional material requests that causes legal fees to run wild.
Two similar case requests with different fees
Recently I filed two cases which had similarities. Each was an individual debtor. In one there was a non-filing spouse, in the other there was a live-in girlfriend. The United State Trustee made similar information requests.
Information an item at a time
Client one, throughout the preparation phase, provided documents in a piecemeal one-at-a-time fashion. Each email with an item ends with the phrase, “Is this all you need?” It never is. Normally the email contains incomplete or a copy of information we already have and had been sent over and over. This poses time consuming issues such as:
- Document must be downloaded and assigned to the proper folder
- It must be compared with other documents to insure it is not a duplicate of one we already have.
- If it is a duplicate additional emails are sent to secure the right item.
- Many times this process goes on over and over to finally have what is needed. Client’s seem unable to process that they are sending the same, wrong item over and over.
- Items may need to be combined or optimized for efficient email transmission.
True to form Client One emailed the things one item at a time. Each of these steps added unnecessary additional time to the case for which I bill hourly. The additional fee for Client One to comply with the requests was three times the amount charged to Client Two.
Bring the papers all at once
Why is the additional fee for Client Two one third that of Client One? Client Two works days. He assembled the items we did not already have. He sent his girlfriend to the office with the paperwork. She sat down with my secretary and reviewed each item. Each was then scanned into the system. Similar items were scanned together preventing the need to combine them into a single PDF. The documents were then organized into a folder for transmission to the Trustee. All that was left for me to do was to draft the cover letter to answer specific questions from the trustee. Easy and effective.
Controlling paper flow controls costs
Your approach to dealing with post-petition requests for paperwork can directly impact how much your chapter 7 bankruptcy will really cost. Bring in what we need, when we need it, and you will minimize additional fees for dealing with the United States Trustee. They are a reality of the bankruptcy process. They do not make these requests in every case, but it is becoming more common. How much it costs to deal with them is up to you.
Old habits of one-at-a-time will enhance the work that goes into processing your paper and increases what your chapter 7 case costs. I make a serious effort to give the most bang for the buck. Expect to pay for wasting time.
Don’t be like Client One. Control your bankruptcy attorney fees.