Bankruptcy: costs of filing bankruptcy with attorney, versus cost of filing using Bankruptcy Petition Preparer.
Under
the current U.S. Bankruptcy Code or law, the system provides
essentially TWO basic categories of outside assistance that a debtor
filing for bankruptcy may use – assistance provided by an attorney, and
assistance provided by a non-lawyer. And both of these parties come
under what is called “Debt Relief Agents or Agencies.” Basically, the
non-attorney assistance provider, who also goes by a name such as
Bankruptcy Petition Preparer (BPP), preparers the documents upon which
bankruptcy is filed with the Court for bankruptcy processing, while the
attorney (or, more accurately, the help he hires that does such work)
prepares the same set of documents, EXCEPT that the lawyer
assistance-provider can supposedly give a debtor “legal advice,” and can
appear, on the debtor’s behalf, in the administrative hearing on the
bankruptcy case administered by the Court “Trustee” (who is not a Judge,
but a court-appointed administrator) that will oversee the bankruptcy
case.
Alright, How Do the Services and Fees Compare, Between
the Bankruptcy Attorney and those of the Full Service bankruptcy
petition preparer?
But what are the Costs of filing Bankruptcy
using Bankruptcy attorney? Can debtors afford bankruptcy without
lawyers? And, is there really any real, tangible, legitimate difference
for the DEBTOR, both qualitatively and nominally, between the Full
Service bankruptcy assistance that online-based non-attorney BPP
agencies provide debtors, and that which is provided by online
bankruptcy attorneys to debtors?
One view of it, popular in
certain quarters among non-attorney online providers of bankruptcy
filing assistance, is simply that there is “no difference,” or “little
to none,” in terms of the actual or qualitative value of their work
products for the debtor. The principal argument is that for each side,
the actual, principal work that each side does or turns up for the
debtor – the relatively simple but time-consuming, paperwork required to
be prepared for the debtor’s use in filing for bankruptcy – is more or
less basically the same content and quality for the non-lawyer prepared
document, as it is for the lawyer prepared. In each case, the argument
goes, the same set of documents are turned up by people who are
seemingly experienced and trained or skilled in document preparation,
and, in deed, in many real instances, are one and the same paralegals
who work, or might have previously worked, for the bankruptcy lawyer’s
office or the non-lawyer document preparer’s company. Or for both.
But,
in any event, in the final analysis, the finished bankruptcy documents
that both sides, the lawyer as well as the non-lawyer, provide the
debtor, are generally the same and of the same quality. The Bankruptcy
Courts generally accept them, process them, and act on them, just the
same! In deed, it is a specific provision in the Bankruptcy Code that
authorizes and sanctions that such persons may prepare such documents,
and not just lawyers!
The Prices the non-attorney helper charges and what the attorney charges for Bankruptcy work
To
a hard pressed and destitute debtor, the vexing, bothersome issue, is
what justification, then, is there for the great disparity that exists
in the prices the bankruptcy lawyers charge for bankruptcy work,
relative to what the non-attorney bankruptcy document preparers charge
for turning up essentially the same work for the debtor? Bankruptcy
lawyers would, of course, advance all sorts of convoluted arguments and
conceive all kinds of fancy justifications in defense of their extremely
higher and disproportionate charges. That aspect, however, is a matter
for another place and another day for us.
But is it a matter of no
bankruptcy attorney, and cheap, low-low cost bankruptcy? For the
benefit and information of debtors contemplating bankruptcy, just so
you’ll at least have an idea, here are the differences in prices between
what the non-lawyer assistance-provider charges, and what the attorney
assistance-provider charges.
NON-ATTORNEY BANKRUPTCY HELPER’S SERVICES & PRICES
Service:
In full Service bankruptcy work, the service of the non-lawyer debt
relief agent or agency basically involves their staff gathering the
various documents and required tons of papers and information together,
and orderly arranging them and preparing all the legal forms and
paperwork required by the debtor to file for bankruptcy with the
bankruptcy court. For the better ones among them (they are not at all
equal, some are far better than others, and quite a number of them are
just about worthless!), these agencies use workers who are often highly
trained and experienced paralegals (they average several years of work
and/or training in the industry), and who are skilled at the preparation
of legal documents and bankruptcy papers, and are often well versed and
knowledgeable in bankruptcy filing law and procedures. With the Full
Service bankruptcy petition preparers (at least those of them who are of
the reputable and better categories), the debtor tends generally to get
a better service and greater attention, and more one-on-one interaction
for his or her case, along with the obvious far lower prices.
The Charges.
There is usually a ONE-Time PAYMENT ONLY amount. One of such agency’s
charge, for example, is $239 for a Chapter 7 bankruptcy; and $359 for
Chapter 13. The price charged by these agencies tend strictly to follow
an honest, upfront pricing that’s based ONLY on “per project,” rather
than on “per hour.” (That’s in contrast to the attorneys’ charges, which
are frequently based on “per hour” hourly rate).
This means that,
once a reputable Bankruptcy Petition Preparer (BPP) takes any case from
a debtor, you pay the BPP Agency, assuming it’s, say, a Chapter 7 case,
just $239, and NOT a penny more on it, ever – no matter how many
creditors you have (whether they’re 10 or 20, or 200), or you happen to
start out with 10 creditors, but turn up 100 or 200 more later. Or, you
have to file some additional papers to get some of your secured debts
“affirmed” so you can keep, say, your car, etc. YOU JUST PAY THEM NOT
ONE PENNY MORE. PERIOD! Thus, for most debtors, bankruptcy with no
bankruptcy attorney assistance, offers the debtor low-low affordable
costs and rates and is the only way to go.
The Time line. For the credible BPP, it takes
an average of roughly one to two days to crank out the prepared, almost
completed package of bankruptcy documents for, say, a Chapter 7 case
filing (in a case, that is, where the debtor has hastened and
substantially provides them the required financial information and
documents necessary to do the papers). As a matter of policy, however,
the BPP will hold off furnishing the papers to the debtor right away
just so that the finishing touches, corrections and proper checking can
be made before the debtor gets them. Bankruptcy, file with no bankruptcy
attorney?
THE BANKRUPTCY ATTORNEYS’ SERVICES & PRICES
Service:
What the bankruptcy lawyer (that is, the one who is competent and
knowledgeable in bankruptcy, as not all attorneys are so equipped) does,
is essentially akin to the Full Service bankruptcy type of work that
the non-lawyer assistance-provider provides. Here, this involves the
lawyer – or, more accurately, a staff of paralegals the he or she might
have hired to actually do the work – gathering the various documents and
required tons of documents and information together, and orderly
arranging them, and preparing all the legal forms and paperwork required
to file for the debtor’s bankruptcy with the bankruptcy court. As with
the case of the non-attorney Full Service paper preparation providers,
these workers who directly do the papers (the ones who are the persons
that actually do the work in the lawyers’ the lawyers), are often highly
trained and experienced paralegals (average several years of work
and/or training in the industry) who are skilled at preparation of legal
documents and bankruptcy papers, and often, well versed in bankruptcy
filing law and procedures.
Furthermore, in terms of quality of
service, with the lawyers, within the ranks of the lawyers who do
bankruptcy work in the current times, those who file the bulk of the
bankruptcy cases seem to be what one practicing bankruptcy lawyer,
Jonathan Ginsburg, the Atlanta Georgia, calls “high volume filers.”
These lawyers file 100 to 500 or more bankruptcy cases per month, using
largely paralegals and some younger lawyers to do the paperwork, and for
one thing, such high volume filers have a reputation for not offering
much in the way of personal attention, but charge somewhat smaller fees
relative to the “boutique” bankruptcy lawyers (those who file more
limited number of cases) – a “smaller” amount of fees which Attorney
Ginsburg admits, however, often still “appear to be too expensive” for
some people “even [with] the lower fees and generous terms” that such
volume filers think their charges represent.
Lawyers’ Charges:
For Chapter 7, there’s the “initial” charge of $2,000 – 2,500; and for
Chapter 13, the “initial” charge of $4,000 – $4,500. Unlike the BPP’s
prices which strictly follow an honest, upfront pricing that’s based
ONLY on one-time-only “per project” basis, the attorneys’ charges are
frequently based on “per hour” hourly rate. (For example, the attorneys’
“per hour” hourly rate charge, was given as $228 (per hour) for their
services in 2002, according to a respected independent research study,
the 2002 Survey of Law Firm Economics, made by Altman Weil Pensa
Publication).
Further more, as a rule, the lawyers’ fees for
bankruptcy (the same, as well, in other issues) vary from lawyer to
lawyer, and from one location to another location, even from a lawyer in
one block to another lawyer just in the next block. The original charge
(it’s usually referred to as the “initial” charge) you’re quoted by the
lawyer, is often only for the run-of-the-mill, routine kind of case –
the simplest, most ordinary kind of bankruptcy there is. So, if it turns
out that you have, say, more creditors than the “average” (say, above
15 or so, depending on which lawyer or what part of the country), it
will mean additional charge slapped onto your “initial” quoted charge.
And, it can cost even more if it’s a “complicated” case in the lawyer’s
opinion.
And further, God-forbid if there’s “litigation” or some
creditor challenge to a debt, that means additional cost for you, a BIG
one. If you are in a high-priced urban area, that alone will almost
certainly guarantee more cost for you in filing for bankruptcy. Also,
your lawyer will generally want his payment made IN FULL and upfront
before he’ll represent you, especially if it’s a Chapter 7 case.
The Time line. Lawyers generally take an average of 2 to 3 weeks (if not more) to do the bankruptcy paper work for Chapter 7.
BOTTOM LINE:
In
sum, for you as a debtor, what you should know is that bankruptcy
lawyers’ generally make the allowance for themselves so they’d be able
and in a position, after the “initial” fee shall have been paid them, to
tack on additional fees beyond the “initial” fees you are quoted when
you first signed on. The fee you are quoted by a lawyer in a bankruptcy
case (even if you view it as excessive, already), may not be – and is
often not – the final charge; you may still have to pay more. And
probably will, generally!
Not so, though, with the non-lawyer
bankruptcy assistance provider. Here, in contrast, that same very EXACT
amount you’re quoted on day one, is the final and ONLY charge you’ll
get, almost always, from them on the case – ever! PERIOD! The motto
seems to be, no bankruptcy attorney & cheap, low-low cost
bankruptcy!
Do you do your bankruptcy filing using the no attorney bankruptcy assistance, or the attorney?. What do you think?
FURTHER INFORMATION
For more on the details of the fundamental differences between the
bankruptcy lawyer’s differential services, costs and benefits to the
debtor, as compared to those provided the debtor by the non-lawyer
helper’s services, or to find out how you or any others may use the
services of one of the major non-attorney Debt Relief Agencies in the
field of bankruptcy filing to file for your own bankruptcy, please visit
this website: http://WWW.Afford-Bankruptcy.Com