So here is the inside scoop:
1. All bankruptcy attorneys filing in a specific court charge within a few hundred dollars of each other. This goes for the bankruptcy court in Utah. The reason: Bankruptcy fees are disclosed in all cases and they are easily available for viewing on-line by attorneys that work in that court. Any attorney wanting to see what the competition is charging goes to the court’s website, a few clicks and voila, they know! Everybody charges within this range.

2. Lawyers are not dumb. They have to run a business and earn a profit to make a living. The guys who charges low-ball prices and tout so called inexpensive bankruptcy make up for the lower margins by running more cases through the office in less time. It’s what is known as a “bankruptcy mill.” Expect less attention and time answering your questions and concerns. You get what you pay for. I get way too many calls from disappointed customers who got no service from such firms.

3. You cannot be overcharged. The U.S. Trustee’s Office (UST), which is the U.S. Justice Department’s watch-dog guarding the bankruptcy system from abuse, closely monitors attorney fees. (This is especially true for the US Bankruptcy Court, District of Utah.) The UST attorneys, and the judges, know the “going rates” for a bankruptcy. Too high of attorney fees, and the UST will file a motion asking the judge to order the attorney to “disgorge” — return the excess fees back to the client.

4.  Special Chapter 7 Financing By Law Firms:  Some firms are now pushing creative financing on people seeking to file a Chapter 7 bankruptcy.  They tout these as “$0 Down Ch. 7 Bankruptcy” cases.  They quickly file a case for you, then tell you that they will need $2800 for them to stay on as your attorney and file the balance of the required paperwork.  Since you don’t have any money they make a deal for you to take out a loan so you can pay them the $2,800 you now owe them.  (FYI this same case cost around $1100 from most lawyers I know that don’t do creative financing)  So just think about it: you went from being debt free for about a minute to being back in repressive debt to the guys that claim to be representing your best interests.  If you couldn’t make you installment payments before the Chapter 7 bankruptcy what make you think you will now be able to make installment payments?  Not what I would call a fresh financial start.

5. When filing a Chapter 13 bankruptcy case in Utah, the court has a set preferred fee schedule. In bankruptcy, attorney’s fees must be approved by the court. To save time and reduce effort by everyone, the local bankruptcy court has set pre-approved fees for cases, based on the range of services to be delivered. As of this writing (Feb 2017), for a routine Chapter 13 case (with no special issues) an attorney will be allowed $3,000 to $3,500 (not including costs) in the US Bankruptcy Court, District of Utah.   Since most cases will involve additional work beyond plan confirmation, the $3,500 flat fee is the most cost-effective for clients and the one usually charged by attorneys.

6. “I don’t have any money, I’m bankrupt.” When the garnishments begin and a creditor seizes your bank account or 25% of your paycheck, you cannot NOT afford the protection and relief from debt that bankruptcy affords. So how do you finance the fees and cost?

A few options:
A. Save it up. Stop paying on debts you will get rid of in bankruptcy anyway, such as unsecured debts or loans on property you are planning on giving back to the lender. Continuing to pay is a waste of money and also a possible “preference” in bankruptcy in which the creditor can be forced to pay the money back to your case trustee to be divided up among all creditors fairly. Also, don’t be accused of “bad faith” if you pay one creditor and don’t pay another before the filing. If you don’t have the means, just stop paying them all.
B. The “friends and family” financing plan. Bankruptcy removes the legal obligation, but it’s not against the law to voluntarily pay it if you want. Many clients get loans or gifts from persons they know to pay for the service. Post-discharge they have more excess income to make a voluntary re-pay.
C. Borrow from, or partially liquidate, an “exempt” asset to generate funds. In bankruptcy, some assets are protected and remain property of the debtor. Retirement plans, for example, are generally exempt. If necessary, you may be able to borrow from it or take a hardship withdrawal, depending on the plan’s rules.

Whatever you do make sure you plan your bankruptcy with your attorney.

7. Return On Investment. The cost of a bankruptcy is tiny compared to the benefits. Run the numbers. If it costs $1,100 (the current average for a typical Chapter 7) to get rid of $30,000 in credit cards, what is the net benefit? Answer: $29,900! A few dollars more or less is insignificant compared to a benefit ten times your cost — assuming you have chosen an attorney for the experience and qualifications to get you results.

8. Shopping for a low-priced bankruptcy is not a smart way to pick a bankruptcy law professional. Cost is only one factor, and a factor of very low relative importance, at that. Instead look for an attorney you trust, with whom you have a good working relationship, who answers your questions, and who has the legal experience and qualifications to get the results you need. Check your attorney out on AVVO or other services and make sure you get someone who will look out for you.