If you’re considering filing for Chapter 13 bankruptcy, you probably want to know how much you’ll have to pay your lawyer. And if an attorney has already quoted you a price, you may want to find out how it compares to what other lawyers charge. We surveyed our readers who had filed for this type of bankruptcy, and for comparison, we researched the fee guidelines used by bankruptcy courts in different parts of Virginia. Here’s what we learned.
Approval of Chapter 13 Lawyers’ Fees
The bankruptcy court has to approve all of your financial expenditures in a Chapter 13 case—including what you pay your lawyer—so the judge will decide whether your attorney’s fee is reasonable. Many bankruptcy courts streamline this approval process by establishing guidelines for flat fees (usually called “presumptive” fees) that the judge will presume to be reasonable. If your lawyer agrees to represent you for the presumptive amount or less, the court will automatically approve the fee without looking at the specific circumstances of the case—which is why it’s sometimes called a “no look” fee. The presumptive fee guidelines may also spell out additional fees when the cases involve certain types of property or debts, as well as the services that should be included in the basic fee.
Where bankruptcy courts have established fee guidelines, most attorneys use them to set their own fees. However, a presumptive fee isn’t an absolute maximum. Lawyers can file a detailed application to request a higher fee for cases that will require more work than usual. Also, if a case becomes more complicated than originally expected, the attorney can ask the court to approve additional fees for further services that are required. Occasionally, the court’s guidelines include presumptive amounts for some of these services.
Presumptive Fee Guidelines for Bankruptcy Courts in Virginia
We’ve reviewed the Chapter 13 fee guidelines that bankruptcy district courts in Virginia have issued (in the form of local rules or “standing orders”). The fees our readers told us they paid—typically up to $2,500—fall well below the maximum amounts recommended by the courts.
Be aware that courts may change their guidelines at any time, so it’s a good idea to check with your local court to get the latest information. Use the government’s court locator tool to find the website and phone number for the bankruptcy court in your area. (Because the guidelines can be difficult to find, your best bet may be to call the court and ask.)
In the Eastern District of Virginia (which includes Richmond, Norfolk, Alexandria, and Newport News), the guideline (found in local bankruptcy rule 2016-1) for presumptive attorneys’ fees and services in all Chapter 13 cases is:
- $5,100 for pre-confirmation services, plus
- $500 for representing the debtor in adversary proceedings.
The guideline for presumptive attorneys’ fees in the Western District of Virginia (which includes Roanoke and Lynchburg) is $4,000. This guideline lists the minimum services that the flat fee should cover, including filing certain types of modifications of the Chapter 13 plan.