Pay Bankruptcy Legal Fees Monthly

Posted on February 17, 2015 at 6:35am by

Can I Pay My Bankruptcy Legal Fees on a Monthly Basis?

According to the magazine U.S. News and World Report, up to one million people are too poor to file for bankruptcy. They cannot afford to pay an attorney to help them nor do they have money for court costs. Although many attorneys working on other legal issues may work with clients to establish a payment plan, this is not an option for bankruptcy attorneys for their Chapter 7 clients. In certain circumstances, it may be an option for those filing under Chapter 13.

Under Chapter 7

Prior to filing a Chapter 7 bankruptcy petition, attorneys must collect their legal fees. They are not being difficult or uncaring by requiring payment in full before filing or refusing to make payment arrangements. The legal fee is considered a debt incurred prior to filing the bankruptcy petition and if not paid before the filing of the petition, it is a debt that will be discharged at the end of the proceedings.

A few bankruptcy attorneys may allow you to make payments prior to the filing of the petition. If so, fees must still be made in full prior to the filing of the petition in the Bankruptcy Court. Unfortunately, it may feel like spinning in a circle. But, if attorneys agreed to accept monthly payments after the filing of the Chapter 7 petition, they would never be able to collect.

Under Chapter 13

Under Chapter 13, debts are restructured and a payment plan is established. If an attorney agrees to it, and the bankruptcy court allows it, the legal fees may be included in the repayment plan. Although a legal possibility, it is unlikely for an attorney to agree. Repayment plans are usually set up to take from three to five years to repay debts.B It is almost impossible to find an attorney willing or able to wait that long to collect their legal fees.