Individuals going through bankruptcy or other financial troubles may be put-off from finding legal help because of attorneys’ fees. That’s why it is important to learn about different “fee structures” and their applicability to your business or family.
Chapter 7 and 13 of the United States Bankruptcy Code deals with personal bankruptcies.
- Chapter 7 is for individuals with a low income, less than $6,575 per month.
- Chapter 13 is allowed for people with debts up to $1,010,650 in secured debt and up to $336,900 in unsecured debt.
- If an individual exceeds these amounts, she will have to file for business bankruptcy under Chapter 11.
Chapter 7 and 13 cases are charged on flat, fixed rate because they are relatively simplistic and allow costs to be estimated.
The goal in Chapter 11 bankruptcy is to convince the court to consider a plan of reorganization. This requires an attorney to sift through corporate paperwork for hours if necessary. Attorneys’ fees for Chapter 11 cases are calculated on an hourly basis because the amount of work needed is unknown, unlike Chapter 7 and 13.
If you are considering bankruptcy for your business, you should consult an experienced business lawyer. Your lawyer will help you understand your options and will guide you through the process, ensuring that you avoid any unnecessary pitfalls.