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Legal Fees In Chapter 7 Bankruptcy Must Be Paid Before Filing The Case

chapter 7 legal fees to start caseI wish we could file your Chapter 7 bankruptcy case immediately – but we can’t. Here’s why.

If you owe us money when your case is filed, we’re considered creditors.

Creditors aren’t allowed to contact you or ask you for money once your case is filed.

If they do, it’s against the law.

At the end of the Chapter 7 case, your obligation to repay most of your debts is wiped out. That would include any outstanding legal fees for your Chapter 7 bankruptcy case.

Here’s what we do instead.

Three Simple Reasons Why We Need To Be Paid Before The Case Is Filed

    1. Pre-petition Chapter 7 legal fees are wiped out at the end of the case. If I’m doing work for you and the legal fee gets wiped out, that’s not fair to me or my staff.
    2. I can’t post-dated checks pre-petition and cash them after filing the bankruptcy. If I do, then the bankruptcy judge may force me to give back the money to your bankruptcy trustee – who will give it to your creditors, not to you.
    3. If you owe me money when we file your Chapter 7 bankruptcy case then I’m your creditor. A lawyer who is a creditor of his bankruptcy client has an ethical conflict of interest, and would not be able to represent the client.

Two Easy Ways You Can Pay Your Chapter 7 Bankruptcy Legal Fees

If you had the full balance of the legal fees in your bank account, you probably wouldn’t need to file for Chapter 7 bankruptcy.

Fear not – you’re not too broke to work with me. In fact, most of my clients pay in one of these three ways:

      1. Can get the money from a friend or relative (we should talk before you do that, though); and
      2. Pay in pre-filing installments by check, money order, or automatic debit from your checking account.

Payment Plans For Chapter 7 Bankruptcy Fees

Just about every Chapter 7 bankruptcy client I have worked with in the past decade has paid their legal fees in installments.

Some people like to time their payments to their paychecks, and have us deduct small installments from their checking account each time.

Others prefer to send in a check or money order.

One thing we don’t do, however, is accept credit cards – for obvious reasons.

How Long You Can Take To Pay Your Legal Fees

Some clients take up to 4-5 months to pay their legal fees. That’s fine by me – the goal is to get you filed as quickly as you can manage.

Starting now is better than starting later, though. Once you make the decision that filing a Chapter 7 bankruptcy is right for you, there’s no reason to wait.

Image credit: aka_lusi

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By |July 27th, 2013|

About the Author:

I've been a consumer protection lawyer since 1995, working to help people end their bill problems. I'm a faculty member at the Student Loan Law Workshop, a nationally recognized speaker, and a long-time member of both the National Association of Consumer Bankruptcy Attorneys and National Association of Consumer Advocates.
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