Fees are always the 800lb gorilla in bankruptcy matters especially in chapter 7 cases as the United States Trustee's Office does not allow attorneys in this region (not just in this state...my practice is in Minnesota and we are part of the 4th Region that the U.S. Trustee's Office administers)to take payments from our clients. So...that is a problem that a lot of people have and unfortunately there really isn't anything that the attorney can do about that as this certainly isn't something that we came up with. That rule has been in effect here since December 2003. Typically most people will save up for the fees, borrow the money from friends or relatives, take a loan on a 401K or a life insurance policy (or cash those out), sell something or a lot of people file after they get their tax refunds. In some certain circumstances we will take payments from third party guarantor. In that situation a third party (your friend or relative) would sign a fee guaranty agreement and give us post dated checks for all the payments.
Some folks will consider a chapter 13 bankruptcy for various reasons and sometimes ease in payment on the fees are one of those factors but certainly not always or even commonly. In a chapter 13 case you can usually get into it for less money and the rest of the fees are paid out the funds that the client is paying into the trustee as an administrative expense of the chapter 13 plan. However, you'd still be looking at coming up with probably at least $1,500.00 in my office and no one that I know one does them for just the filing fee down anymore. In Minnesota the "presumed" fee set by the court is $2,500 for the attorney fees if the debtor(s) are below the median income and $3,000.00 if they are above it. Some jurisdictions are much higher....California for instance. Often the fees can run higher than the presumed amount dependent on the issues in the case. We file a fee application with the court in that instance that itemizes line by line what our time was spent on plus and costs, fees or disbursements that were incurred in prosecuting the case. That is filed with a motion asking the court to review our application and issue an order directing the trustee to pay the balance of the fees requested if it is determined that it is appropriate relative to what went on in that case. Typcially we will file that fee application and the motion for hearing once the chapter 13 plan is confirmed (read "approved") by the court.
So....as far as what a case costs overall it is safe to say that fees are dependent on the nature of the case and it is hard to quote a fee for any particular case without doing the case analysis as there are a lot of variables that can determine what the fee would be. Things like is it a 7 or a 13? There are other factors as well. Is it joint or individual filing? Is it a business case or is there self employment involved? Is there a trust or a contingent remainder interest in real estate? Are there multiple pieces of real estate? Are the clients over the median income and do we need to do long form means testing to determine if they qualify for a chapter 7 case? Have they been in the jurisdiction long enough for us to use the local exemptions or do we need to apply those from another state? Are we going to use either the state or the federal exemptions? Is there any non-exempt property? Will we will be engaging in pre-bankruptcy exemption planning? ......the list goes on and as you can see there are a lot of things that factor into how a fee is quoted in a bankruptcy case. We do have fairly standard fees for what we would consider a "fairly standard" case....problem is that just quoting someone that standard fee means that in a lot of circumstances it wouldn't apply and then people get disappointed when they are quoted a different number after we've had a chance to do the case analysis to see what is actually going on with them and what it would take to do a case for them. Standard cases in Chapter 7 are what we refer to as the "mom and pop" cases....translate that as a married couple working for wages with a mortgage or two and probably a couple of car loans, some credit card debt and maybe some medical bills. Anything past that and then we get into more complications. If it helps at all fees roughly...emphasize "roughly" are currently as of the date of this writing usually between $2,000 and $2,500 (varies from place to place how much attorneys will charge...some places it is quite a bit less....others it is quite a bit more depending on the locale and what the going rate is for the debtor's bar there) including the filing fee for a joint chapter 7 case. Sometimes less and sometimes a whole lot more depending on the nature of the case and the circumstances presented. Everyone brings something different to the table. Little old ladies on social security and no assets to speak of don't pay that much...that's because their cases are pretty simple and dont take much time. More complicated equals more time for us which translates into higher fees for our clients. So...while I can't give anyone a specific quote when we're at the stage prior to the consult and I don't know much of anything about them...that is basically how the fee structure works. The fixed costs are nominal...those are the filing fee and the fee for the credit report we pull. The rest of it is what we've got into the case for time and that is the one thing that can't truly be determined unless we know what our prospective client has got going on and why we offer a free consultation and case analysis to figure that out.