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mmdesq
mmdesq, Attorney
Category: Bankruptcy Law
Satisfied Customers: 516
Experience:  Attorney with 13 years experience.
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I live in MA and I am filing chpt 7 with an attny I have

Customer Question

I live in MA and I am filing chpt 7 with an attny I have worked with for about 2 months. I spoke with several attnys at the beginning to find someone I felt comfortable with and had reasonable fees. She told me it would be $900 for her services for the
whole process. She charged us $400 to complete the means test and Schedule I & J. She stated that we met the requirements and had us come in to interview with her. After we had the interview with her, we paid her the additional $500 and the $335 filing fee.
Through all my conversations, we talked only about the $900 total. However, as we were signing the contract, she handwrote the following at the bottom, "$112.50/hour if further information is requested by the trustee, or matter is contested". Could you please
tell me if this is typical when filing for chpt 7? And, should I be worried about how much this could end up costing us? I don't understand why this she did not disclose this to be beforehand and why this had to be handwritten when this is a standard contract.
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  mmdesq replied 1 year ago.

Good Evening,

I will try to best answer your question.

Your attorney should have told you this language would be added at the beginning and you would not have been surprised. However, this is not unusual as it only covers additional and unforeseen expenses if they arise. Probably unlikely that they will rise. All lawyers will charge additional fees if this happens. She just should have disclosed this to you up front.

Customer: replied 1 year ago.
Thanks for the quick response, mmdesq. I am afraid this could balloon out of control. Obviously, if I am filing for bankruptcy, I don't have money and I don't know how I would pay these additional fees. All of the research I have done shows that either you pay a flat fee or an hourly fee. I have not seen both. Again, I also don't understand why this is not typed into the contract and why it was handwritten at the end.
Expert:  mmdesq replied 1 year ago.

I don't know why she is doing that fashion. However you have to allow provision in case trustee discovers problem unforeseen or if client neglects to disclose relevant details. I always disclose this information to my clients up front so I didn't waste their time or mine.

Customer: replied 1 year ago.
ok. I understand that you typically would not have done this and she should have specified up front. But, what advice do you have for me? I still don't know if I should be worried about what this could end up costing me. For the cost of her services, shouldn't she expect that the trustee will ask her for additional information? How much time would she likely need to charge me? If the matter is contested, how many additional hours should I expect that I would need to pay her for? I know you don't know the specifics to my case, but I am just trying to get a sense of what I could be responsible for.
Expert:  mmdesq replied 1 year ago.

It is hard to predict. My best guess would be 0 to 10 hours.

Customer: replied 1 year ago.
I want to try this again. I had multiple questions in my last reply. I think I need a different response. I first asked how many hours she may need if they ask for additional information - I'm assuming that might be the 0-10 hour range. However, if the filing is contested, are you stating that would also be in the 0-10 hour range? I don't see how it being contested could be 0 hours?
Customer: replied 1 year ago.
Also, I appreciate your viewpoint on how you would have handled this, but would most attnys filing chpt 7 charge a flat fee and then expect an hourly rate for the items she noted at the bottom of the contract? Goes back to my initial question of asking it this is typical.
Expert:  mmdesq replied 1 year ago.

Most lawyers will charge a flat rate for chapter 7. It is common however to have a provision to cover unforeseen expenses created by the chapter 7 trustee or the client. There are things that can happen in the case beyond the control of the lawyer. For example, I have had clients win the lottery while in a bankruptcy, receive an inheritance, become involved in an accident leading to a personal injury case, beneficiary of a life insurance policy as result of a death during bankruptcy, etc. These events can trigger the trustee to attack those assets and the debtor attorney fighting to preserve them. Those types of events are not included in a basic flat fee. They are not likely to occur but they are possible which is why she put in the provision. I would suggest if you are uncomfortable with it try to locate an attorney charges purely a flat rate.