What can we do about out attorney fees if we are in bankruptcy? 15 Answers as of November 14, 2013

My husband and I filed a Chapter 13 bankruptcy to protect our house. We were working on a loan modification that did not go through and payments were behind. We are 18 months into the Chapter 13 and I just found out that we have paid $9,449.04 to the attorneys through the bankruptcy (not to mention the 2500+ that we paid upfront). We are in 100% bankruptcy and have not talked to our attorneys in almost 12 months. I have NEVER gotten a monthly statement of fees etc. Is this even legal? I was told originally by the "partner" of the firm that we would be a little higher than the 3000 because of all our assets but this is NOT ACCEPTABLE. Is there anything that we can do? Any recourse? We also just listed our house we have an offer. I talked to the attorney and was told if we remove the home from the bankruptcy that our payments will go up the amount of the house payment. I have no idea where to go for help. I feel taken advantage of and that the attorneys are NOT looking out for our best interest! HELP!

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Rhymer Law Firm
Rhymer Law Firm | William Rhymer
It sounds like there is a little confusion. The $9449.04 you have paid was probably sent to the Chapter 13 Trustee. The Trustee then takes the money and distributes it under your plan formula. You should not have paid your attorney any money directly, after the case was filed. You can call your Chapter 13 Trustee and they can tell you how to get a Trustee's status report that will show how much they received and where the money was paid. I would suggest you call your lawyer and make an appointment to go in and see him or her face to face and discuss your feelings on how your case is going.
Answer Applies to: Georgia
Replied: 11/12/2013
Law Offices of Peter De Bruyn
Law Offices of Peter De Bruyn | Peter De Bruyn
File a complaint with the state bar. In thirty years of bankruptcy practice, I have never heard of the chapter 13 trustee approving fees over $3,000.00.
Answer Applies to: California
Replied: 11/13/2013
Charles Schneider, P.C.
Charles Schneider, P.C. | Charles J. Schneider
It is not possible that you would not have known that you could be charged as much as you have without first signing a contract agreeing to be charged an hourly rate. An attorney charges for his time and knowledge. Loan modifications can in intensive and your charge is not so unusual. It is most likely you who asked for his assistance in obtaining a loan modification which is out of the ordinary course of saving a home from foreclosure in a chapter 13. In any event, all the fees of an attorney have to be approved by the court as the attorney has to prepare a fee application detailing what was done, who did it and what was their hourly rate. You can object, the Trustee can object, the creditors can object, and the Judge out of the blue can object. The fact that you want to short sale your house does not make sense when the attorney is telling you that your potential savings in a mortgage payment would go to your unsecured creditors. By the way you cannot accomplish the short sale without the attorneys involvement and hence more attorneys fees. It is because you are setting the table for more legal services such as loan modifications, short sales that the fees are increasing. In any event object to the attorney's fee application when presented and see if the judge agrees.
Answer Applies to: Michigan
Replied: 11/13/2013
Tokarska Law Center
Tokarska Law Center | Kathryn U. Tokarska
I'm sorry to hear about your troubles. There is some information in this question that doesn't seem to make sense. LEGAL FEES: Legal fees that the attorney gets for the handling the case should be spelled out in the attorney/client agreement. You would not be receiving a monthly statement from the attorney. In addition to the attorney/client agreement, there are two forms in the bankruptcy petition itself, which I assume you reviewed and signed before the case was filed, that can shed some light on this. The Rights and Responsibilities form, lists the "initial fee charged in this case". Also form called "Compensation Statement of Attorney for the Debtor(s)". This form should spell out what the attorney agreed to accept for legal services and how much compensation was received before the filing of the case. Unlike hourly attorneys, bankruptcy attorneys work on flat fees, so we agree on a price for particular work and that price and the extent of the work is supposed to be spelled out in the attorney/client agreement, plus in the forms discussed above. $3,600 is a standard fee for a consumer case. If there are services such as lien strips, opposition to relief of stay motions, and others there may be additional fees for those services, refer to the Rights and Responsibilities form. In order to receive ANY money from the funds held by the Trustee, the attorney must file an Application for Compensation and Confirmation of the case, which is reviewed by the Trustee and if approved funds are disbursed after the confirmation. Perhaps the $9,000 you are referring to are Trustee fees. This is compensation the Trustee receives in administering the case. LOAN MODIFICATION: I'm next confused by the loan modification aspects of the case. I would want to know if you fell behind on mortgage payments since the filing of the case, in other words incurred post-petition mortgage debt and hence were trying to modify the loan to add these and the pre-petition past due amounts into the principal balance? I wonder if doing this, assuming the lender would be willing, makes sense but I can't say without looking at your case. If this is for pre-petition mortgage payments, these should have been included in the Plan itself so why not just let the case take care of them? Again, this should be an interactive discussion and I would need some information here about your situation. It is true that while the case is active, in order to sell the property you would need to obtain court's approval (btw: the attorney can and will charge to file the motion on this). Whether selling the property is wise, necessary, again involves taking a look at what has happened since the filing of your case. It could also be true that the Plan payments may need to increase if the property is sold since the mortgage payments, assuming were a deduction from your income, are no longer your responsibility so there could be some potentially additional disposable income now BUT you state that this is a 100% plan so I'm not sure why the Plan payments would increase. I mean if the Plan is paying all the debt in full, why would you need to pay more? Bottom line on all this is that without looking at the details of the case, your particular financial circumstances, your goals/reasons for filing, it's impossible to advise you on how to best move forward other than to say that you could consult another attorney to review the case and give you advice. This seems a logical thing to do if you lost all faith in your current counsel.
Answer Applies to: California
Replied: 11/14/2013
Stuart P Gelberg
Stuart P Gelberg | Stuart P Gelberg
The atty fees could not have been paid without court approval. What does the trustee say?
Answer Applies to: New York
Replied: 11/12/2013
    Goldsmith & Guymon
    Goldsmith & Guymon | Marjorie Guymon
    The attorney cannot send you a bill during the 13. He must, however, petition the court for approval of the fees and mail you notice. You can file an objection at that time as to the amount if you feel it is in excess of the work done on the case. The no look fee or average fee for a 13 in this district is $4,500. If you had a loan modification ongoing it could have increased the fees by another $3,000 or so.
    Answer Applies to: Nevada
    Replied: 11/12/2013
    A Fresh Start
    A Fresh Start | Dorothy G Bunce
    The disclosure of fees would have been in the bankruptcy paperwork you signed and was filed with the court. Any additional fees would have had to have been approved by the bankruptcy court. So not to be sarcastic, have you read any of your bankruptcy paperwork or your retainer agreement?
    Answer Applies to: Nevada
    Replied: 11/12/2013
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    That is extremely unusual, fees cannot be paid without an approved order for fees. Get a second opinion, something is very odd here.
    Answer Applies to: California
    Replied: 11/12/2013
    Elkington Law
    Elkington Law | Sally Elkington
    It is difficult to understand from your post, why your attorney fees are so high and how you didn't know about them. Either you agreed to those fees in the beginning of your case, or the attorney has filed a fee motion or motions along the way. If there were fee motions, you should have received copies when they were filed, and you could have gone into court and objected to the fees. So, you should find out from the attorney how he was paid those fees. As to selling your house and having to pay a higher payment, assuming you will still have at least a rent payment, I wouldn't think your payment would go up the full amount of your prior house payment. All that being said, if you can, you should make an appointment with your attorney and get your questions answered. The attorney works for you, not the other way around. You have a right to understand your bankruptcy and your payment. If you have lost confidence in your attorney, you have a right to fire him and hire another attorney, but that attorney will want to be paid for his or her work, as well. So, in the long run you might be paying even more than you have thus far.
    Answer Applies to: California
    Replied: 11/12/2013
    The Law Office of Darren Aronow, PC
    The Law Office of Darren Aronow, PC | Darren Aronow
    That is a very high amount to pay to your attorney unless you have been litigating an issue. You should require that the attorney explain himself to you as all his fees should have been disclosed to you.
    Answer Applies to: New York
    Replied: 11/12/2013
    Deborah F Bowinski, Attorney & Counselor at Law | Debby Bowinski
    It is very common for attorneys fees to be paid through a confirmed chapter 13 plan. The procedures vary from one state to the next, but chances are that your lawyer had to submit some sort of fee application to the court for approval before the trustee began disbursing funds to him. The fees being paid through your plan are for the work that has already been done through the confirmation process - there is not likely anything you can do to change that. You can review your plan and your fee agreement, call the lawyer, or contact the trustee to try determine what the total amount of fees is that will be paid. It is also common for the attorney fees to be paid first, before payment to any creditors. As far as the sale if your house goes, those procedures and the results of such a sale also vary significantly from one state to another. You can certainly consult with another lawyer if you don't feel comfortable with the advice you are receiving. I would suggest that you call your lawyer first and ask questions. You have the right to ask why questions, and if you don't understand something your lawyer should be willing to try to explain. If you DO decide to seek a second opinion or decide to retain replacement counsel you should expect to be asked to pay a new retainer toward services to be provided by the new lawyer. A major change, such as the sale of your home, is something to discuss with your lawyer before it is completed. Good luck.
    Answer Applies to: Colorado
    Replied: 11/11/2013
    Rosenberg & Press
    Rosenberg & Press | Max L. Rosenberg
    In a chapter 13 bankruptcy you are required to make monthly payments to the trustee that are applied toward your debts but more particularly toward your mortgage arearage. If you hired attorneys for 2500 for the chapter 13 and managed to have everything taken care of than you did very well. 2500 is a very low fee for the work that goes into the filing and creation of a chapter 13 plan. Moreover it is not at all unusual not to hear from the lawfirm once the 13 is in full swing. The problem you are having is in getting a call back for a status. You may want to go directly to their office to speak to someone. However it does not sound like you have been taken advantage of or robbed. If you have to pay more into your attorney fee, it would not be surprising or out of the ordinary as a chapter 13 can take five years and an attorney may be required to do many more things to keep that train from being derailed. For more information, please contact our offices.
    Answer Applies to: Connecticut
    Replied: 11/11/2013
    Law Office of Stuart M. Nachbar, P.C.
    Law Office of Stuart M. Nachbar, P.C. | Stuart M. Nachbar
    In a Chapter 13 to get paid, attorney must file fee applications on notice to Debtor and Creditor. Take it up with the Judge.
    Answer Applies to: New Jersey
    Replied: 11/11/2013
    Law Office of Barry R. Levine | Barry R. Levine, Esq.
    In Massachusetts, attorneys who charge more then $4,000 for a ch. 13 usually have to file a fee application with the court to approve such fees. Something is not right with you having paid almost $11,000 for a ch. 13. At the very least, your attorney should be more then happy to provide you with an itemization of his/her bill for services rendered. Failing that, there is the Office of the United States or BBZo to contact.
    Answer Applies to: Massachusetts
    Replied: 11/11/2013
    Ferguson & Ferguson
    Ferguson & Ferguson | Randy W. Ferguson
    I have never heard of such a high fee. You need to talk to an attorney or someone in the bankruptcy court.
    Answer Applies to: Alabama
    Replied: 11/11/2013
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