How Much Should I Pay to Hire a Bankruptcy Attorney in New York?

A question many of our clients and prospective clients in Manhattan, Brooklyn, Westchester and surrounding counties have is why the fees some attorneys charge for consumer bankruptcy cases are much less than others?

Experienced and knowledgeable bankruptcy attorneys who specialize in bankruptcy tend to charge fees that are set fairly close to each other. In part this is because the fees charged by bankruptcy attorneys are not a mystery. Bankruptcy attorneys are required by law to disclose the fees charged to their clients on a statement filed with each bankruptcy petition. Bankruptcy attorneys who regularly practice in the Bankruptcy Court often will see these statements in the course of their practice and know what their colleagues are charging. Generally these fees reflect what the experienced bankruptcy attorney believes will be a reasonable and fair fee to cover the anticipated issues likely to arise in the debtor’s case.

There are some attorneys, however, who charge a fee that is considerably less than that charged by an experienced bankruptcy attorney.

First of all, many of the attorneys charging low fees are new to bankruptcy practice or don’t specialize in it. They may take whatever type of legal work they can get. However, bankruptcy is a very specialized area of law, and experience gained in another area of law may not be particularly useful to bankruptcy cases.

In addition, the attorney charging the vey low fee typically will provide a much lower amount of service and will require the debtor to pay cost items separately. For example, the attorney charging the lowest fees will often require you to provide a separate money order payable to the Clerk of the Court to cover the filing fee ($299 in a chapter 7 case and $274 in a chapter 13 case). He or she will typically require you to arrange for and pay for mandatory Pre-Bankruptcy Credit Counseling and mandatory Post-Bankruptcy Financial Management on your own. He or she typically will not obtain any independent “due diligence” materials to make sure that all of your creditors have been accurately included in your bankruptcy petition, such as a credit report, or will require you to obtain them at your own expense. In addition, he or she typically will often subcontract certain aspects of your case to people outside of his or her law firm, such as bankruptcy petition preparers to prepare the bankruptcy documents and appearance attorneys to cover the meeting of creditors.

While people filing for bankruptcy often feel that they are getting a bargain by selecting the attorney with the lowest fee — often they are disappointed with the quality of the representation and the lack of meaningful attorney-client interaction, and client guidance and preparation for the different stages of the bankruptcy case.

The attorney charging much lower fees must take a higher volume of cases to earn the income that he or she needs to meet his or her office overhead expenses and make a living on top of that.

This means that the attorney charging the lowest fees has an economic incentive to do as little as possible on each case — because from his or her perspective he or she is “losing money” if he or she does anything more than a bare minimum amount of work.

At Starr & Starr, PLLC we have a different perspective. We limit our practice solely to bankruptcy, insolvency, debtor-creditor and commercial collections matters. We handle our personal bankruptcy cases and client representations in a manner that provides the client with preparation and guidance at each stage of the case. Our fees are set to be highly competitive with those of other experienced and knowledgeable bankruptcy attorneys who have a high success rate in obtaining discharge of debt for their chapter 7 clients and confirmation of chapter 13 plans for their chapter 13 clients. In quoting our fees there are no hidden costs or extras — the fee is clearly broken out to specify the fee and all cost items that are anticipated in connection with you case.

At Starr & Starr, PLLC we are experienced in representing debtors in personal bankruptcy cases in New York. Please feel free to contact us at 888-867-8165 or by e-mail at info@starrandstarr.com to schedule a consultation.