How Much Does a Bankruptcy Lawyer Cost
It's natural to wonder how much it will cost to hire a bankruptcy lawyer to help you get a fresh start. This article will explain how bankruptcy lawyers charge for their time.
A lawyer's bill can be influenced by several factors, such as:
- The billing method they use
- How much they charge within that billing method
- How long it takes to finalize your bankruptcy
- How much you will have to pay in related legal expenses, such as filing costs
When it comes to determining how much you will have to pay, the billing method a lawyer uses is just as important as how much he or she charges. Generally speaking, bankruptcy attorneys use one of two billing methods: either an hourly fee or a flat fee. Learn more about how bankruptcy attorneys get paid.
No matter which billing method your lawyer prefers, you are bound to have additional, outside expenses to pay related to your bankruptcy filing. Additional expenses may include:
- Court filing fees
- Bankruptcy trustee fees
- Consumer counseling fees
- Photocopying costs
- Attorney travel expenses
- Paralegal fees
There may be room for negotiating a bankruptcy attorney's legal fees. However, you must ask about this before you hire someone, usually when you are still in the interview phase of your search. Once you hire a lawyer, it is too late to renegotiate the fees.
Hiring a Bankruptcy Attorney by the Hour
If you decide to hire a bankruptcy attorney who charges by the hour, you will probably be asked to pay a retainer fee, which is similar to a down payment. You'll then receive monthly bills that must be paid promptly.
Bankruptcy lawyers who charge by the hour usually break the hour into 15-minute or 6-minute increments. That may seem like little difference, but it does add up.
Say, for example, you talk to your bankruptcy attorney for 5 minutes by phone. If the attorney charges $200 an hour in 15-minute increments, that conversation just cost you $50. If the attorney charges $200 an hour in 6-minute increments, the call only cost you $20.
Lawyers take several factors into consideration when figuring out how much to charge by the hour. They consider:
- The amount of experience they have
- Their location
- The complexity of the legal matter
- The cost of overhead to run the office
You should not assume that just because a lawyer charges more, it will cost you more. More experienced lawyers may be more efficient with their time, saving you time and money.
Hiring a Bankruptcy Lawyer for a Flat Fee
Lawyers who handle fairly routine matters, such as writing a will or filing bankruptcies, may offer their services for a flat fee. The flat fee may not be all-inclusive, meaning you may still have to pay court fees and other related costs. If you decide you want to hire a bankruptcy lawyer who charges a flat fee, make sure you know what is and is not included in that fee.
How and when you pay your flat fee will vary from lawyer to lawyer. You will want to ask about payment options.
In addition, flat fees are typically not refundable. This means that if you change your mind about filing bankruptcy or if you want to switch lawyers, you probably will not get your money back. If you have any doubts, be sure to resolve them before you hire a bankruptcy attorney for a flat fee.
The Cost of Hiring a Bankruptcy Attorney
There are several questions you may have to ask to determine exactly how much it will cost to hire the bankruptcy attorney. Here are some questions that should help:
- Do you charge a flat fee or by the hour?
- What is included in your flat fee or hourly fee? What is not?
- Can you give me an estimate for the expenses I will have to pay on top of your fee?
- Does your legal fee have any room for negotiation?
- If I pay a flat fee, what kind of payment plan do you offer? Is it refundable?
Once you have the answers to these questions, you'll have a much better handle on how much it costs to hire a bankruptcy attorney.