A Colorado bankruptcy court decision makes the pay-before-filing policy necessary. Any amount owed to a bankruptcy attorney at the time of filing of a chapter 7 is dischargeable and can be wiped out just like any other debt.
There is a procedure called reaffirmation that allows a debtor to put himself back on the hook for a debt after bankruptcy. But reaffirmation demands strict compliance with the bankruptcy code and form requirements. A reaffirmation can also be canceled within a certain time period.
So it is understandable why an attorney wants to be paid up front. If an attorney is willing to do a reaffirmation, there are risks involved and the extra work involved usually increases the cost of the bankruptcy.
With what's at stake, consulting with an experienced bankruptcy attorney licensed to practice in your state may be a good idea.
If you want to know more about the meaning of certain key words used in bankruptcy, see the federal courts' web site for a glossary of bankruptcy terms: http://www.uscourts.gov/Common/Glossary.aspx.
My law firm is a federally designated debt relief agency and helps people in Colorado file for bankruptcy relief under chapters 7 and 13 of the Bankruptcy Code.
I agree with Mr. Hunt. It is relatively uncommon in Colorado for attorneys to file chapter 7 cases before their fees have been paid in full. When a reaffirmation agreement is involved it often significantly increases the total cost.
The only other option I can think of might be to try to find a cosigned for your fee agreement, but again, that would most likely involve higher fees than otherwise.
To echo what Atty Hunt said, in chapter 7 cases, fees need to be paid before the bankruptcy case is filed. This can be a problem for both the debtor and the attorney in circumstances similar to yours. This is an unfortunate timing issue because of the garnishment.
I presume you have no funds available to pay your attorney. Perhaps you can seek to borrow funds from a family member or friend -- not an ideal situation and it puts a burden on your attorney to explain to the court where his fees came from.
You have 2 other options -- in some jurisdictions, an individual can file a chapter 13, the sole purpose of which is to get the benefit of the automatic stay and pay attorney fees over time. This might be permitted in Colorado. Second, you can simply file your bankruptcy on your own and seek a waiver of the filing fee. But it is unlikely your attorney will turn over his or her work product so you would have to start from scratch. But based on what you are saying, you need to file for some bankruptcy relief immediately to put the garnishment on hold.
The Bankruptcy courts in many jurisdictions have ruled that if an attorney files a Chapter 7 without being paid in full that they have no legal right to even ask you to pay the balance. So good luck trying to find someone to help you out without payment in full! My suggestion is make paying your bankruptcy expenses your top priority. Hope this perspective helps!
Unfortunately, it isn't legally effective to try to collect fees after the case is filed. As a result, an attorney has to be paid before the bankruptcy case can be filed.
You can reach Harkess & Salter LLC at (303) 531-5380 or info@Harkess-Salter.com. Stephen Harkess is an attorney licensed in the state and federal courts of Colorado. This answer is for general information only and does not create an attorney client relationship between Stephen Harkess or Harkess & Salter LLC and any person. You should schedule a consultation with an attorney to discuss the specifics of your legal issues.