Want to hire a cheap lawyer, watch out!
23 August 2010
Frequently my office receives calls from people saying they are contacting all the bankruptcy lawyers listed in the phone book and inquiring:
“How much do you charge for a bankruptcy?”
The caller fails to realize that there are different chapters to file under, which are very different, including different amounts of time and cost involved. In my opinion, advising what chapter to chose is very important. See e.g. In re Buck, 2010 WL 274621(Bankr. D. Mass. July 9, 2010) (Bankruptcy judge discusses chapter selection and related issues). What the caller also fails to realize is that bankruptcies are all different, and can be quite complicated. A caller may think their case is “simple” and providing a quote should be easy. But a proper analysis for possible bankruptcy issues needs to be done before one could say that with confidence.
So, I cannot provide a quote until an initial analysis is invoked. What I fear is that these people who are shopping for an attorney, apparently based on price, end up hiring the lawyer that quotes the cheapest price. (My office prices cases on the low side when comparing apples to apples, but we are unlikely to be the cheapest among many quotes.) What they don’t know is that it is likely the cheapest lawyer will in all likelihood not include certain services that the client may need to maximize the benefit of their potential bankruptcy. For example, in a chapter 13 plan, or if there are assets to distribute in a chapter 7, there can be a real benefit for the debtor to file a claim in his own case on behalf of a creditor when the creditor fails to do so itself. Why would a debtor want to do this?
Some debts remain after bankruptcy, either because they are not dischargeable, or for other reasons. Making sure these debts are paid, in any amount, even a small amount, will benefit the debtor going forward. It would surprise you just how often creditors don’t make claims, and this added service is necessary to ensure the debtor gets the most from his bankruptcy. Some creditors simply don’t pay enough attention. See e.g. United Student Aid Funds, Inc. v. Espinosa, 130 S. Ct. 1367, 1374 (2010) (creditor failing to object in timely manner to chapter 13 plan results in discharge of interest on the debt). So, it pays to ensure that claims are filed for certain debts in these situations.
The bargain priced lawyer is unlikely to catch this issue, let alone even be thinking about it; (it will not make the checklist). It is a service that is not required. It is just one of the many issues that are likely to not be addressed in a bankruptcy if a potential debtor chooses a lawyer based primarily on price. The sad truth is, in all likelihood, the debtor who chooses the cheapest priced lawyer, will never know they did not maximize the benefit of their bankruptcy when certain tasks are not performed.