The Chapter 13 attorney fee is tightly controlled by the bankruptcy court in Cleveland. Other than your initial payment to your chapter 13 bankruptcy attorney, fee payments will be part of your chapter 13 plan payment. There are two ways that fees may be charged and paid by you:
- The Standard order of the court
- Retainer with hourly billing
Standard Order for Fees
There is a document you will sign as part of your filing package called the Rights and Responsibilities. This is actually an addendum to the court’s order. This form sets forth the mutual duties you and your attorney have in the case. Additionally it sets the amount you have paid before the case is filed and how much of the fee will be paid by the chapter 13 trustee from your plan payments.
The standard order for chapter 13 in Cleveland works like this:
- Total “no look” fee is $3,000. That’s the amount the court will approve without further scrutiny.
- Attorney can charge up to $800 plus filing costs, with the balance paid through the plan over the first year.
- Fees for additional services in the chapter 13 are governed by the Rights and Responsibilities. Most are flat fees, with some based on the attorney’s hourly rate. Additional fees can only be paid upon application by the bankruptcy attorney with court approval. You can object in writing.
Retainer with Hourly Billing
Chapter 13 bankruptcy can be a complicated, time intensive case for your attorney. That is precisely why many bankruptcy attorneys do not do them. They are just a lot of work to get your plan confirmed, and to address all the sundry issues that can arise throughout your payment plan. $3,000 is a lot of money. Sadly it is often not sufficient to pay for all the work that your case demands. It is an amount of money that is well behind the no look amounts of other metropolitan areas, including Akron.
Some attorneys now charge a retainer in the $2500 to $3,000 area. They carefully track each minute spent on your case. Once your plan is confirmed they file a fee application with the court for approval of payment for time spent, less the retainer of course. In conversion cases where I am compelled to charge hourly fees, they can easily exceed $5,000.
One thing you have to remember is that any fee you pay your chapter 13 bankruptcy attorney before filing which is over $800 requires court approval of the fee. If the attorney fails to do so they may be ordered to return the fee. This is a process called disgorgement.
Balena Law Firm, LLC follows the no look formula of the Cleveland Bankruptcy Court. For additional services after plan confirmation, I follow the requirements of the court’s standard order, but often that allows for hourly billing.