Attorney Fees
Lawyer Fees Jumped 50% After Bankruptcy Law Change
Posted Aug 5, 2008, 11:20 am CDT
By Debra Cassens Weiss
Additional work required by a new bankruptcy law has spurred a 50 percent jump in attorney fees.
The average fee in a Chapter 7 liquidation in February and March of 2007 was estimated at $1,078, compared to $712 two years before, the Wall Street Journal reports (sub. req.). In Chapter 13 reorganizations, the average fee was $3,000 in February 2008, compared to $2,000 before the Bankruptcy Abuse Prevention and Consumer Protection Act took effect in October 2005.
The findings were part of a report (PDF) issued last week by the U.S. Government Accountability Office. The new law requires debtors to satisfy a complicated means test before filing for Chapter 7 bankruptcy, the ABA Journal reported in “The Exodus Begins.”
University of Illinois law professor Robert Lawless told the Wall Street Journal that higher legal and filing fees are a significant amount of money for a family on the verge of bankruptcy. "It's very possible to be too poor to be in bankruptcy because you can't afford the filing," he said.
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Comments
Posted by Jennifer - 3 weeks, 2 days, 7 hours, 35 minutes ago
It’s very true (as a former consumer bk atty).
If the gov’t wants consumer bk attys to cut fees, they need to make it easier to file. More than the means test, the amount of time it takes to get clients to provide supporting documents in and of itself is the most arduous process. Once a lawyer knows how to calculate the means test, it doesn’t take that much time. However reviewing the files over and over again, calling clients for missing docs etc., takes weeks and months. It sucks up all your time.
Posted by Josephine - 3 weeks, 1 day, 6 hours, 54 minutes ago
Filing bankrupcy is a very tedious process adding to the fact that the filer is already so poor, depressed & stressed and cant even afford to buy food for his family, therefore backs out filing bankrupcy due to the cost and time to gather all the documents to support the means test. The person filing bankrupcy is usually even out of job so what means test can he possibly provide for the filing.