How Does My Bankruptcy Lawyer Get Paid?
Filing for bankruptcy is sort of a paradox. You’re looking for financial relief, but obtaining that relief comes at a cost. If your finances are already tight, it’s normal to wonder how you’re going to pay a bankruptcy lawyer, or what the process is for how they get paid. We’ll now cover some common questions about this important aspect of bankruptcy.
How Do I Afford to Pay My Bankruptcy Lawyer?
While this doesn’t explain exactly how your attorney is compensated, it is something most filers are concerned about. You cannot use a credit card to pay your lawyer. If you make significant charges just before you file for bankruptcy, your case may be dismissed.
Oftentimes, filers stop paying their debts beforehand and use those funds to pay their bankruptcy fees. This is acceptable by bankruptcy courts. Just make sure you qualify to file for bankruptcy before you stop paying credit cards, loans, mortgages, medical bills, etc.
Asking family and friends for financial help is another option. While you can’t use a credit card to pay a lawyer, they can. If a family member or friend knows you are within sight of financial relief and have met with a bankruptcy attorney, they may be more willing to help out. After all, it’s more cost-effective than bailing you out month after month.
How Do I Pay a Chapter 7 Bankruptcy Lawyer?
A Chapter 7 bankruptcy lawyer requires payment in full before your case is filed. This also applies when the filer wants to immediately stop a wage garnishment or foreclosure. Once your bankruptcy is filed, an automatic stay prevents most creditors from collecting unpaid debts. Your attorney also won’t be able to collect an unpaid fee. Therefore, they’ll only take your case if paid upfront.
How Do I Pay a Chapter 13 Bankruptcy Lawyer?
You are not required to pay the total fee with Chapter 13. Depending on the bankruptcy lawyer, they may accept a partial payment plus the court filing fee. That’s if they’re confident you’ll follow through with your plan. If you fail to make monthly payments, the court will dismiss the case. Your lawyer will then not get their full payment. To protect their interests, many lawyers request an amount similar to a Chapter 7 case and the remaining amount through your Chapter 13 repayment plan.
Can I Pay My Attorney In Installments?
Many bankruptcy attorneys accept installments. A Chapter 7 bankruptcy lawyer may let you pay fees through an installment plan, but won’t file your case or any related paperwork until you’ve paid in full. Many people choose to hold onto the funds they’re saving until they have enough to cover the full amount. However, providing some cash means you’ve retained a bankruptcy lawyer, who can handle any creditor who harasses you as you’re preparing the rest of your payment.
Since a Chapter 13 bankruptcy case lasts from three to five years, your attorney may not require the full amount upfront. The trustee will pay the attorney in installments, out of your monthly plan payments. This usually works by applying payments made early in the case to attorney’s fees. Once your attorney is paid, your trustee will then start distributing payments among your creditors.
Contact OakTree Law for Bankruptcy Assistance
Whether you plan to file for Chapter 7, Chapter 13, or Chapter 11 bankruptcy, our Los Angeles bankruptcy lawyer can help you navigate your case. We specialize in a wide range of bankruptcy services and find solutions that work for each individual client’s financial situation. To learn more, request a free evaluation online or call us at 888-348-2609 today.