I am planning to declare bankruptcy for my debts.
I do not own a business or anything and most of my debts are from loans and military debt and student loan. I am aware student loans cannot be dismissed but I would like to clear my credit card debts and military debt if possible.
Now I have visited several offices and got a price ranging from $900 to $3,500.
My question is "What makes such a huge difference in the fees"?
Does the lawyer's performance vary such that it would give me different results in how much debt I can be forgiven? Or is it pretty much the same?
I would prefer to use the cheapest service but if this is going to result in, lets say $20,000 difference in bankruptcy amount, it would be logical to use the more expensive service.
Any advice would be appreciated!
While price is always an issue I suggest you find the attorney or a couple that you like the most and feel most comfortable with. Honestly $3,500 seems steep but I do not practice in NJ. Make sure you check whether the fee quoted includes the court costs and if there are any other fees etc.
Some lawyers believe in practicing a large volume of cases and charge less others believe in charging more and doing less cases. It also depends on the chapter if you file chapter 7 it is generally about $2,000 more than filing a chapter 13 case. A price of $3,500 for a chapter 7 case is extremely steep while that is a normal price for a chapter 13 case. Look up the lawyer's reputation and ask how many cases they have done, those factors are more important.
The higher quote sounds more like a Chapter 13 fee, and honestly it can be a close call as to whether a case would fly as a Chapter 7, versus Chapter 13. There are fights every single day between consumer attorneys and the United States Trustee as to whether a consumer is eligible for a Chapter 7 discharge, even when they pass they means test. You should have a feel for who is competent, but sometimes when you pay peanuts you get monkeys.
As with all professions, the quality of lawyers varies significantly. Factors that go into how much a lawyer charges are (1) experience, (2) expertise, (3) complexity of the legal matter, and (4) location (New York City lawyers will charge more than rural lawyers because they have more overhead, etc.). While price is an important factor to consider when choosing an attorney, it should not be the final factor driving your decision. This is an important decision and you should feel comfortable that the lawyer that you're speaking with knows what they're doing. To the extent possible, you should try to get recommendations from others (lawyers that don't do bankruptcy, friends or family that may have filed in the past, internet research, etc.).
Think of it like an auto mechanic; the dealership charges the most, but you know they have professionals that will do high quality work. On the other hand, the local chop-shop maybe the cheapest but the quality of the work may be terrible. Would you use the cheapest doctor available? Maybe for a check-up, but what about heart surgery?
It depends. The difference is not so much in the "result." Unless you have something complex, attorneys can only affect the outcome of a case on the margins. The difference lies in the road to get to the result. Understand, when you hire an attorney, you are hiring a "person" to perform a service. You are not buying a product. The difference lies in "how" that person performs the service. In short, the difference is in customer service.
If you go with a cheap firm, you will probably never meet with the attorney. In some cases, the initial consultation is the only time you will see the attorney, and even then, in many large practices, the initial consultation is done by a paralegal. In addition, almost the entire case is handled by a paralegal. In cheap firms, you are hiring a paralegal with an attorney stamp. They are not going to take the time to answer questions or be at your beckon call if something happens. Nor do the (nor can they) take the time to explain everything to you.
As you go up the fee scale, customer service typically improves and you get more direct attorney involvement in your case. You will probably meet with the attorney a couple times during the preparation process and you will be able to access the attorney relatively directly via phone and email.
Again, the difference is not in the result (so much), but in the path to get there. Generally, with cheaper firms, the client ends up with more surprises because the firm can't take the time to explain the nuances. When you have direct attorney involvement with more expensive firms, generally, you won't get surprises and at least know what is going to happen.
Let me give you an example. I was in the ante room for the 341 meetings. As is typical, the high volume firm had their paralegal their preparing the clients for the 341 meeting. At the meeting, in a very nonchalant way, the paralegal informed a client that he would have to surrender his firearms. It was clear from his reaction and the follow-up conversation that this was the first time this client was hearing about it. But, keep in mind, the BK had already been filed and he was about to go have his trustee meeting. So, there is nothing he could do about it. Granted, the "result" of him losing his firearms may not have been different with a more involved attorney, but at least he would have known going in and could have made an informed decision.
You HAVE TO HAVE different expectations. You cannot go to a $900 firm and expect $2500 worth of service. Doesn't work that way. Only you can decide what is important to you. If want cheap, and don't care, just understand you will be a number at a deli line and will be practically flying blind. If you want service, responsiveness, and real legal help, you will need to pay for it.
Each lawyer sets his own fees, which sometimes are negotiable. Often the fees are not by competence, but sometimes by the way the lawyer chooses to operate, or how new they are. New is not necessarily worse - a 3 year lawyer may be as good as a 30 year one. Or may not. There are ways you can evaluate this - by how many cases of a type they take or have taken, or by recommendation. Or you can ask someone you know in the legal profession whose work they like, even if they are not in the same specialty. Or you can look at ratings on this site.
Again, a chapter 13 is probably going to be more than a chapter 7, but sometimes it is uncertain which it will be. The law has changed a few years ago with regard to this, which (probably unintentionally) has led to higher fees as an additional step is often involved.
$3500 would be high for a Chapter 7 case but not for a Chapter 13. The price depends upon which chapter you file. Chapter 13 cases are more time consuming because there are more court appearances and a plan procedure that has to be confirmed. As the old expression goes, "you get what you pay for." I know when it comes to my health my main concern is to find the best doctor. Then I'll worry about how to pay his/her fee. You should be approaching this the same way.
Everyone here has basically told you the same thing.
I'll add only one thing. In most districts the high end for a Ch. 7 is $2000. When you get past that amount, the lawyer ends up facing issues about charging excessive fees and may have to get a court order approving those fees.
$3500 would be the low end for a Chapter 13. You use a 13 when you're trying to save a house or car from being taken by the trustee or taken by a creditor.
You need to be more specific as to which chapter and what was proposed.
In either event, you choose a lawyer who has a good reputation in the legal community. When you narrow your list contact the bar and see if any of them have had disciplinary issues; also you can google their names and see if there are any negative client reviews.
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