Learn How to Select a Good & Competent Chapter 13 Attorney in California
Selecting a good and competent chapter 13 California bankruptcy attorney is not always easy. You have to find someone you trust, yet that attorney must also be competent at what he or she does. One characteristic without the other will not take you very far in terms of the chapter 13 process.
California Chapter 13 Bankruptcies are more involved than chapter 7 cases oftentimes because most clients are subject to Form22C which is the Chapter 13 equivalent of the means test. Furthermore, in chapter 13 cases, the trustee scrutinizes Form 22C much more so than the chapter 7 trustee in a chapter 7 case. That’s because a chapter 13 trustee gets paid administative fees based on how much you are paying into the plan, and oftentimes, Form22C comes into play for above median debtors (for example, a household of 1 person who earns more than around $48,000 gross annually will be subject to filling out all sections of Form22C to determine a baseline of disposable income to repay unsecured creditors).
When Form B22C comes into play, calculations of disposable income must be done by an attorney who has the experience, precision, and capabilities to calculate the numbers properly while applying and understanding applicable case law within the district in which your bankruptcy is filed. However, that is just the beginning of the chapter 13 process. Getting the plan confirmed requires other steps including having the chapter 13 trustee review and confirm the plan, and overcoming any objections by creditors. Also, liens on property may need to be stripped in many cases today in which underwater homes are at issue; taxes issues may need to be resolved all before or during the confirmation process to a chapter 13 case.
So ultimately what do you look for in a chapter 13 attorney? Here is a simple checklist:
1. Ask how many chapter 13 cases the attorney has filed.
2. Ask of those cases filed, how many chapter 13 cases were actually confirmed – meaning a plan was confirmed by the chapter 13 trustee. Understand, this is not the same as asking how many cases received a chapter 13 discharge. Getting a plan confirmed generally means the attorney did his/her job at least intiially, and got the plan, that the client had asked for, approved by the bankruptcy court. However, it is then up to the client/debtor to see the plan through by making plan payments. Failure to do so will result in the chapter 13 case being dismissed by the court for failure to make plan payments and therefore a chapter 13 discharge is never entered due to the client/debtor’s inability to see the plan through. (Sadly, some attorneys have been known to mislead potential clients about how many cases they confirm vs. the ones they file – thus use your judgment and common sense in picking the attorney. Trust your gut on this and consult at least 2 different attorneys, assuming you have the time/luxury to do so).
3. Ask the attorney if he has ever had a plan confirmed over the chapter 13 trustee’s objection. Usually that means the attorney knows how to push issues and understands the laws of chapter 13. A chapter 13 trustee will object where he/she feels the debtor is not paying out enough in the chapter 13 plan’s proposed monthly plan payments. When the trustee objects, a bankruptcy judge will hear the case, assuming the debtor’s attorney fights the issue. Where the attorney overcomes an objection by the trustee, that means legal issues are addressed in court whereby the court makes a ruling that the debtor’s attorney took a proper position in crafting the chapter 13 plan, and that the chapter 13 trustee is not entitled to push for a greater distribution of disposable income.
4. Ask how much the attorney charges up front - usually when an attorney offers to take your chapter 7 case for little or no money down, that is a good sign you have a chapter 13 case that is not legally complex and devoid of any overwhelming obstacles to confirmation of the chapter 13 plan. However, even if your case is straight-forward, don’t expect a good bankruptcy attorney to take your case for free if your foreclosure is scheduled for the next day. That simply will almost never happen.
5. Ask how much the attorney charges for the total chapter 13 case. Oftentimes, unless you really know the attorney is good, those who charge significantly less than the no-look fee of $4000.00 may not be fully competent chapter 13 attorneys. Most good and capable chapter 13 attorneys will not take a chapter 13 case for less or much less than the no-look fee since there is a lot of work to do in chapter 13 cases. To be clear, I am talking about the TOTAL attorney’s fees, not the upfront fees before filing. The total fees must be clearly and fully disclosed in the bankruptcy papers so that it is very clear to all parties. If you are being billed hourly, rather than based on the no-look fee, that should also be clearly disclosed in your bankruptcy paperwork. If you don’t see it, ask your attorney to show it to you before filing.
7. Ask the attorney if you ever have to pay them attorney’s fees directly after the filing of the case. Do not EVER go to an attorney who says you must pay them attorney’s fees directly AFTER the chapter 13 bankruptcy has been filed. An attorney’s chapter 13 post-petition fees are paid through the plan, meaning the chapter 13 trustee will pay the attorney any balance of chapter 13 fee’s owed. If you have filed a chapter 13 case and are asked to pay attorney’s fees directly in addition to making plan payments, contact the United States Trustee’s Office and let them know immediately.