Our standard chapter 13 fees are paid by an initial upfront payment which is needed to officially file the case and the remaining fee balance is thereafter paid to us when the client makes a payment every month to the chapter 13 trustee.
In order to start a standard Chapter 13 case, we need a payment of $690 towards our fee and $310 for the court filing fee, for a total of $1,000.00.
If the case is a “code red” case, which has to be immediately filed, we need $1,100.00 upfront. Examples of “code red” cases are a repossession which is about to happen or that has already happened, an upcoming sheriff's sale, a wage garnishment, a frozen bank account, utility shut off, real estate tax foreclosure, eviction, or anything else that needs immediate attention to protect our client.
Bankruptcy attorney fees are subject to the supervision and approval of the Bankruptcy Court. Set forth below is part of the latest N.J. Bankruptcy Court Rule governing attorney fees in a Chapter 13 case. The Rule sets forth the standard Chapter 13 attorney fee of $4,750 for all standard legal services performed by the attorney until confirmation of the plan. So, our normal fee is $4750 plus the $310 filing fee. Once the case is confirmed, if there are any additional legal services required, the attorney is permitted to apply to the court for additional fees, and those additional fees are also under the supervision and control of the Bankruptcy Court.
Below Are Set Forth Relevant Portions of New Jersey Bankruptcy Rule 2016-5.
Compensation of Debtor's Attorney in a Chapter 13 Case
“(b) Standard fee. An attorney who charges a fee of $4,750 or less is not required to file an application for compensation. The standard fee included all services and reimbursable necessary expenses required to confirm a plan, including administrative services required subsequent to confirmation.”
“The attorney may file an application for compensation and reimbursement of necessary expenses under Local Bankruptcy Rule 2016-1 for the following services which are excluded from the standard fee:
Representation of the debtor in an adversary proceeding;
Representation of the debtor in loss mitigation/loan modification efforts;
Representation of the debtor in post confirmation filings and matters brought before the court.”
The Court charges a filing fee of $310 to file a Chapter 13 case. This is in addition to the $4,750 attorney fee. One of the great things about Chapter 13 is that you don't have to pay the complete attorney fee upfront. You simply pay $690 towards our total fee, plus the $310 ($1000 total), and then the balance is paid to us as the client makes monthly payments to the trustee.
So, to make it simple, you just pay us $690 towards our fee plus $310 for the court filing fee, for a total of $1,000. The attorney fee balance will be paid to us by the trustee as the case moves forward, and as you continue to make your monthly trustee payments.
Once you make your initial payments to us to start your Chapter 13, you will usually not be required to pay any more money directly to us because we will be paid our fee balance as the Chapter 13 case moves forward.
If additional services are required beyond the standard services, we will request the court to allow us an additional fee that will usually be paid to us through the plan. Once in a while, depending on what has to be done as an additional service, we may need payment upfront for that special service.
Please let us know if you have any questions about the fees and costs.