Wednesday, August 24, 2005

Bankruptcy Fees

What fees will be reasonable under the new Act? I have heard fees as high as $5,000 for a chapter 13, and up to $3,000 for a chapter 7. Are these reasonable? I'm not so sure. Chapter 13 cases will change, but not all that substantially, it seems that there are more changes that will require more work in chapter 7's (i.e. reaffirmations, redemptions...). I can understand an extra $500-$600 for a chapter 7, but, $3,000 for a chapter 13, that seems hard to justify. We already have to provide most of the additional information required under the new act in this jurisdiction, so what extra work are we doing? In chapter 13 we will have to provide annual amended schedules I & J, and may be required to provide copies of tax returns. OK, that is not enough to justify thousands of dollars... Where are the extra fees going to come from?

In the end, the market will determine our fees. Sure, you can charge $5,000 for a chapter 13, and have an empty waiting room, or you can be reasonable and charge $2,500 and have a full waiting room, right? One we get over the initial shock of new rules I would guess we will find the equilibrium of the market and come to a reasonable fee range. What are your thoughts?

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