How should I evaluate the price a particular bankruptcy attorney is offering me?

It is admittedly difficult to evaluate different offers of help with bankruptcy. There are very inexpensive "preparation only" options online, some I have seen as low as $149 for a Chapter 7. These prices cannot of course include the filing fees and other costs. Prices offered by attorneys that I have seen range between $1,100 and $4,500 for "ordinary" cases.

So, what's the difference between the $1,100 and the $4,500 options?

Many firms specialize in "volume" bankruptcy filings. They are extra-efficient, everything is proceduralized, and they want nothing whatsoever to do with out-of-the-ordinary facets of a particular bankruptcy case. Rather than try to file a case that fits the client's needs precisely, these types of firms prefer to make the client's needs fit their process. As a result, it can seem very cold, clinical and isolating to be a client of one of these firms. Worse, there may be things that a smart attorney can identify in your bankruptcy that may be out of the ordinary but accrue to your great benefit.

For example, an attorney who takes the time to get to know your situation may help you exempt more of your property from the bankruptcy liquidation (i.e., you get to keep it). This extra attention can be worth tens of thousands of dollars (or more). But an attorney lives by selling his or her time, so the extra time with you may cost a few hundred dollars more.

I recently helped a client whose salary is greater than $100,000 to get into a Chapter 7. The bankruptcy software concluded he didn't pass the means test and could only file a five-year Chapter 13 plan. However, I did some research and found case law that permitted us to reclassify some of his expenses, and we (just barely!) got him into a 7, which permits a final discharge upon completion of the case over a few months. This saved him perhaps $15,000 per year for five years, or $75,000. A low-cost bankruptcy preparer does not have the time to spend on each case to try to "think outside the box" to obtain a better result for his or her client.

Finally, it is important to note that it is legally acceptable to prepay your bankruptcy fees using otherwise nonexempt money (i.e., the trustee would take it anyway), even when there are other exempted funds available.

A bankruptcy is not the first place to start economizing. Your bankruptcy starts off the rest of your life. Many clients have concluded that their bankruptcy was the best thing that ever happened to them. Make sure your bankruptcy goes as well as it possibly can by carefully selecting your attorney based on the quality of the service.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.