When I meet with a client, usually one of the first topics they want to discuss is how much is bankruptcy going to cost them and how are they going to pay their attorney’s fees. Understandably this is a concern, because if money wasn’t tight they wouldn’t be seeking the help of a bankruptcy attorney. Unfortunately, bankruptcy attorneys have to collect all of their attorney’s fees and the costs of the case before a Chapter 7 case is filed. There is a simple reason for requiring these costs to be paid up front. The same laws that protect someone in bankruptcy from collection by their creditors also prevent bankruptcy attorneys from collecting their attorney’s fees after the case is filed. When an attorney agrees to accept payment of their attorney’s fees for the filing of a Chapter 7 case after the case is filed, they put themselves and their clients in a difficult situation. Not only is the attorney violating the law by attempting to collect a pre-petition debt in violation of the automatic stay but they are also creating a conflict of interest between themselves and their clients. Smart attorneys avoid this problem and get paid up front so that once the case is filed they can focus on the needs of their clients instead of collecting their attorney’s fees.
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