The price to file for bankruptcy in Kentucky for Chapter 7 is $338, and for Chapter 13, it is $313. Still, the answer to this question becomes more nuanced if you decide whether to file for bankruptcy with an attorney or try to waive the filing fees.
A person already finding it challenging to cope with the regular expenses might wonder how they can afford the bankruptcy fees, especially in a year when inflation runs rampant.
Many bankruptcy costs, like the credit counseling course fee and filing fee, are comparatively similar; however, the bankruptcy attorney fees might range dramatically when you reside in Louisville.
The main reason I am writing this article today is to inform you about the bankruptcy attorney fees, bankruptcy filing costs, and the regular salary of the bank attorney in Kentucky.
How Much Does it Cost to File Bankruptcy in Kentucky?
What is a Reasonable Attorney Fee in a Louisville Chapter 7?
Nolo wrote in 2020, “for a Chapter 7 case, the average attorney fee in Louisville for Chapter 7 and nearby cities fall within the $1,200 to $1,500 range.” This is the base salary data for a simple single-filer Chapter 7 case. Business cases, enormous debt, contested cases, and cases with multiple homes are charged more in Louisville and nearby cities. The average salary, salary data, and fee for consumer attorneys are lower in Kentucky than in many other states.
Moreover, a couple is charged about $200 more than a single person. Our office charges 1200 for a single and 1400 for a couple. We have charged this fee from 2010 until about 2022. We expect to raise it by $200 for an uncontested Chapter 7 case in 2022 or 2023.
The Problem with a Low-fee Case
If there is a low fee, you may have a bankruptcy mill. Bankruptcy mills churn out a large number of cases, hand you off to a paralegal, and you have little or no contact with an attorney. Nolo says, “If a paralegal does the work and is your only real source of contact, you may have hired a bankruptcy mill.” To prevent attorneys from overcharging, every Chapter 7 case has to list what the attorney charged on a bankruptcy form called “Disclosure of Compensation.” The panel trustee, the US Trustee, and an auditor review the case and the fee to ensure it is reasonable. If the fee is excessive, the trustee files a motion asking the judge to cancel it or return it to the client.
In a Chapter 7 bankruptcy, attorney fees are supposed to be paid upfront, so the attorney is not in the unethical position of being both attorney and a creditor. He should only be worrying about your case. Lawyers shouldn’t be worried about how he needs to work around the court rules to get paid fairly. After filing the case, the attorney becomes a creditor if he is owed pre-petition fees, which becomes an ethical problem.
Unethical Chapter 7 Attorney Fees
Some attorneys advertise a low initial upfront fee. It is possible to pay the filing fee in installments. But what happens is the attorney pays himself before filing the case, and the filing fee is paid over time. The attorney gets paid, but when the filing fee is not paid in full, it causes the case to be dismissed. Then the attorney charges a second fee in a second case. It’s a popular marketing tool and a fast way to build up a practice. But if the attorney is having cases dismissed, it isn’t in your client’s best interests.
Chapter 13 bankruptcy Attorney and Filing Fees
In a Chapter 13 bankruptcy case, your attorney’s fees are paid through the Chapter 13 plan. There is a no-look fee where attorneys are paid the same fee, which in 2022 is $4100 in the Western District of Kentucky and $4000 in Indiana. The no-look fees assume the fee is reasonable without looking over the case and salary data. Some lawyers allow you to pay their full fee through your repayment plan, and you pay the filing fee.
Most attorneys, however, acquire an initial payment or a couple of plan payments to prove to the court that you can and will make payments during the plan. This tends to prove the plan is feasible. This also ensures the filer will pay at least part of the attorney’s fee. Paying your first payments into a trust account is especially needed if you have not been making mortgage or car payments for some time. When creditors claim you have no intention of making the plan payments, and you are stalling these plan payments, prove you have the intent and ability.
The Filing fee for Chapter 13 is slightly less than the Chapter 7 filing fee. But there are mailing costs to serving the plan in Chapter 13, increasing filing costs to about the same as the filing fee for Chapter 7 ($338 in 2021). We bill clients the same filing fee for a seven and a 13 to cover the costs of mailing the Chapter 13 plan, which is not required in Chapter 7. The filing fees increased by just $3 in 2020.
Chapter 13 No-look Fees
Most courts release the standard fee that the attorneys may charge for a Chapter 13 bankruptcy without the court reviewing it called a no-look fee. Unless more than the standard work is required, attorneys cannot charge more than this no-look fee. If the case is unusual, the attorney may document the work and file a motion for fees documenting the work done and the cost.
After the Chapter 13 plan is confirmed, the attorney may request additional fees if the case requires additional work. But this is rarely granted unless the attorney has somehow increased the money paid in the plan. Extra work that is often caused by the client not making payments to the Trustee on time or disobeying other rules is rarely a basis for compensation.
Chapter 13 no-look fees are different for each judicial district. However, they are typically between $3,750 and $4,100 in Indiana and Kentucky. The good thing about Chapter 13 bankruptcy is that you often don’t have to pay the attorney fees upfront.
Paying Trust and Bank’s Stay Termination Fees
The bank can file a motion to terminate the stay because the debtor is not making mortgage or car payments on time. If the court grants the motion in part, the debtor will often have to pay the court costs and attorney fees for the bank’s attorney filing this motion. Making mortgage or plan payments late may cost a client over $1000 in attorney fees and court costs.
However, you may need to pay the first few Chapter 13 plan payments into the attorney’s trust account. Attorneys will ask for either the plan payments or part of their attorney fee before filing a Chapter 13 case to ensure the client plans to make the payments into Chapter 13. How much your bankruptcy lawyer will require upfront depends on your case and often how difficult it will be to confirm the plan. An average consumer case often looks at 1000 to 1500 plus the filing fee for Chapter 13.
Chapter 7 Bankruptcy Attorney Fees
Corporate lawyer fees are higher than consumer lawyer fees. In 2022 A Corporate Chapter 7 will often run about 5,000 dollars and up. Lawyer fees in a corporate Chapter 7 case must also be paid before filing. This is because your debts are stayed during the case and discharged at the end of the Chapter 7 case. You eliminate any debt for an attorney fee you owe at the moment of filing. There may be work that you want to be done after filing the case. If you need a hearing continued or need to file an amendment, that work happens after you filed the case, and you pay for it when and only if you need it done later.
The less experienced corporate lawyer’s salary is typically not so much as or may take payments over time. Still, they are more likely to violate the rules than lawyers with years of experience. Sure it costs a couple of hundred more, but you are less likely to lose property, and you may discharge more debt if you use the services of an attorney with years of experience.
Complicated Cases Have Higher Pay Fees
Fees should be based on how complicated a job description of the case is. Don’t make it more complicated than it has to be. Unless you have to file a motion to redeem or strip a lien, it is rare for you to need additional work in Chapter 7 after the case is filed.
But if you own a business or have multiple homes, you will generally have higher fees for the added work involved. It will cost more if you create more work by missing a hearing or failing to take your debtor education. People with a lot of assets will need more work done in their case and will have to pay more attorney fees than an unemployed person with no assets.
When you pay your bankruptcy attorney depends on whether you file a Chapter 7 or a Chapter 13 bankruptcy. How much you pay him and when you pay him has to be disclosed. The attorney cannot be a creditor in Chapter 7. A consumer or corporate lawyer can’t demand payment from you after the case is filed for pre-petition work. If he does, he can be sanctioned by the court.
Here is the audio, an hour-long recording of a judge punishing a Louisville attorney and over 30 clients for paying attorney fees after the cases were filed and all the related jobs were done. The young corporate lawyer probably thought it was great advertising. It brought him a lot of clients. But cases were dismissed or had hearings to dismiss them due to these schemes.
You can stop the harassing phone calls by hiring an attorney. You can pay fees in payment plans before the case is filed. But paying the filing fees in installments after the case is filed and filing skeleton petitions draws attention to your case.
Average Salary for Bankruptcy Lawyer in Kentucky
In Indianapolis, the bank’s attorney is usually paid between 350 to 500 per hour to take your home. The Bank’s average salary range for its senior attorneys is about 180,000 annually. The bank applies its attorney fees to your mortgage or car loan. Forbes magazine said in 2020, “The national average annual wage of an attorney is $144,230”. This is taken directly from the bureau of labor statistics.
An average salary in Kentucky for an attorney is $100,100, but Kentucky also has some of the nation’s least qualified attorneys and related jobs. The average salary in Kentucky for a national fresh out of law school attorney is now close to $100,000. The bankruptcy court doesn’t issue job alerts with a base salary for a consumer attorney. Very few jobs with a lawyer salary exist for consumer attorneys. Instead, most consumer attorneys run their own businesses.
Frequently Asked Questions
1. Does Increase in the Inflation Rate Affect the Cost of File Bankruptcy in Kentucky?
With the spike in the inflation rate, a question that often comes into the filer’s mind is whether the cost of bankruptcy is also affected by it or not. Let us cover how and whether inflation can influence the bankruptcy cost and filing fee.
The increase of a few dollars was made after the rise in the inflation rate over the past few years. The change is so minimal that you can expect it can impact you negatively.
2. Filing Bankruptcy Yourself: Is It Possible?
If you are willing to file a bankruptcy without hiring a professional attorney, it is known as filing pro se. However, hiring a qualified and experienced attorney is always recommended to make a healthy attorney-client relationship and gain proper guidance about legal technicalities.
3. Can I file for Bankruptcy Chapter 7 for Free in Kentucky?
If you want to file for bankruptcy Chapter 7 for free, you don’t need to hire a bankruptcy lawyer for this. You need to follow these steps:
- Complete the documentation
- Attend the credit counseling course
- Completion of bankruptcy forms
- Get the bankruptcy filing fee
- Printing of bankruptcy forms
- Filing the forms to the Kentucky bankruptcy court
- Send your documents to the bankruptcy trustee
- Make sure to attend the debtor education course
- Attend 341 meetings with the trustee and creditors
- Dealing with the car
Find a Qualified and Experienced Bankruptcy Attorney in Kentucky!
Whether you want to file bankruptcy in chapter 7 or chapter 13, Nick has the expertise to cover them. With over 30 years of experience, I understand how to help my clients with bankruptcy cases.
We handle foreclosure cases and student loan discharges and can assure you we can manage your legal and financial issues proficiently. Contact my law firm now to build a trusted attorney-client relationship.
If you are considering bankruptcy, don’t delay because timing is crucial. I am here to help you. So, contact my office right away to start the conversation. Nick C. Thompson, Bankruptcy Lawyer: 502-625-0905