Bankruptcy Retainer Agreement
The U.S. Bankruptcy Code and the local rules of each individual bankruptcy court in the United States establish the parameters and procedures for attorney retainer agreements. The failure to comply with the provisions of the Code and local rules can result in the voiding of the retainer the court and even the dismissal of your bankruptcy case.
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Function
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The function of the retainer agreement is to establish the fee you will pay an attorney to represent you in a bankruptcy case. A retainer agreement sets forth the manner in which the fee is to be paid. Additionally, a retainer states your responsibility to reimburse an attorney for expenses associated with your case.
Considerations
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Most attorneys require the retainer for a bankruptcy be paid in full up front and before she undertakes any work on your behalf. Some attorneys understand that a client facing bankruptcy obviously has financial problems. Therefore, these lawyers are willing to develop a payment plan for their clients. The specifics of the payment plan are included in the retainer agreement.
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Maximum Fee
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The local rules of each bankruptcy court establish parameters for what an attorney can charge a client in a bankruptcy cases. Typically, the local rules establish a maximum fee for a particular type of bankruptcy. These fee limitations vary by jurisdiction. Therefore, if you have a specific question about attorney fees, contact the bankruptcy court clerk's office, which will have fee guideline information. If a case requires additional services beyond what normally is associated with a particular type of bankruptcy, an attorney and client can seek permission from the court for the payment of additional fees beyond the maximum generally allowed by the court.
Restriction
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If you need to pay your bankruptcy case filing fee in installments, the U.S. Bankruptcy Code and local rules restrict you from paying any attorney fees until the filing fee to the court is paid. The theory is that if you cannot pay the filing fee at the start of the case you should not be permitted to pay your attorney fee at that time. Make sure your lawyer knows you intend to pay your filing fee in installments so that he will not be surprised to hear of a delay in you paying fees for his services.
Misconceptions
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A misconception associated with a bankruptcy retainer agreement and attorney fees is that these costs must be paid through the payment plan that is part of a Chapter 13 bankruptcy proceeding. A Chapter 13 bankruptcy is a proceeding through which a debtor pays off her obligations through a court supervised repayment plan over the course of two to five years. Attorney fees set forth in a bankruptcy retainer agreement can be paid independent of the court decreed repayment plan.
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References
Resources
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