How Much Does a Bankruptcy Lawyer Cost?

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 How Much Does a Bankruptcy Lawyer Cost?

The amount it costs to hire a bankruptcy lawyer in the United States will depend on a number of factors. These include the type of legal services they are being asked to provide and/or the fee structure that a law firm or individual bankruptcy lawyer assigns to a particular matter. 

Without taking into account any other specific details, the average cost of a bankruptcy lawyer in the U.S. as of 2021 falls somewhere in between $200 and $400 per hour. Of course, this is an estimate and will vary on a case-by-case basis. For instance, costs can be as high as $2,000 for a complicated bankruptcy case, or as low as $500 for a straight-forward filing. 

The best way to calculate the total cost of hiring a U.S. bankruptcy lawyer is to speak with your prospective attorney about their hourly fees and/or rate structure. To learn more about the bankruptcy process or to find a low cost bankruptcy attorney near me, you should start by searching LegalMatch’s database.

What Factors are Used in Calculating Bankruptcy Lawyer Fees?

As discussed in the above section, there are a number of factors that need to be considered when determining the total cost of hiring a U.S. bankruptcy lawyer. Some factors that are used in calculating bankruptcy lawyer fees may include the following:

  • Fee structure: Many lawyers will charge a flat rate when taking on a bankruptcy case. This is especially true in cases for Chapter 7 bankruptcy. This means that a client will have a general idea of how much a bankruptcy lawyer’s services will cost. It also means that the client will likely need to pay a portion of the flat fee upfront. 
    • Alternatively, a bankruptcy lawyer may decide to bill at an hourly rate instead. As the phrase implies, it means that a client will be charged for how much work a bankruptcy lawyer did on their case per hour. In general, bankruptcy cases typically require a lawyer to charge at a “reasonable” rate.

  • Experience: The experience, skills, and reputation of a lawyer will also factor into the total bill. For example, a newly admitted bankruptcy attorney who does not have an established reputation yet, will normally cost much less than a bankruptcy attorney who has been practicing for years and has a stellar reputation or success rate for resolving bankruptcy matters.
  • Firm size and type: The size of a law firm may play a role in the final bill amount. The general rule of thumb is that the bigger the law firm, the higher costs. However, this is not necessarily true if a small firm solely specializes in bankruptcy cases. The type of law firm will also affect how much a bankruptcy lawyer or firm costs. For instance, a private law firm is more expensive than hiring a non-profit organization or a legal aid service to work on a bankruptcy case. 
  • Firm location: The location of a firm or lawyer can also affect the price of a bankruptcy case. Generally speaking, lawyers and/or law firms in urban environments (e.g., Los Angeles, New York City, etc.), tend to cost more than lawyers and/or law firms in rural or suburban locations. 
  • The bankruptcy chapter: On average, filing a petition to initiate a Chapter 11 bankruptcy case is usually more expensive than the cost of filing a petition for a Chapter 7 or Chapter 13 bankruptcy. 
  • Difficulty of the bankruptcy case: The complexity of the issues in a bankruptcy case will likely affect the overall cost as well. This is because they will usually involve more paperwork, filing fees, court proceedings, and so forth. 
  • Time spent to resolve the bankruptcy case: The time that a law firm or lawyer spends on a bankruptcy case ties directly in with the factor of the difficulty of a bankruptcy case. Typically, the more complicated the bankruptcy case, the more time that a lawyer or law firm will need to work on it to settle the matter. Additional hours translates to additional costs.

What Other Costs are Associated with Bankruptcy?

Some other costs that a debtor may need to factor in when calculating the cost of filing a petition for bankruptcy include:

  • Various court costs and filing fees;
  • Travel expenses;
  • Retainer fees (if applicable);
  • Whether the individual is representing themselves pro se or hiring an attorney; 
  • The cost of a mandatory credit counseling and/or financial management course; and
  • Expenses related to administrative tasks, such as photocopying, printing the filing forms for court, and the cost of mailing such forms.

In addition, a debtor should also incorporate the expenses associated with a further dispute or issue related to a bankruptcy case. 

What Do Bankruptcy Attorneys Do?

The primary goal of bankruptcy is to restructure and manage a person’s overwhelming debts. In some cases, such as those for Chapter 7 bankruptcy, the purpose may shift to partially reducing or entirely eliminating such debts. Bankruptcy attorneys can provide a wide range of legal services to help their clients achieve these goals. Some examples of what a bankruptcy attorney does on a regular basis can include:

  • Ensuring that the client understands what bankruptcy is, how filing for bankruptcy will personally affect them and/or their business, and that they know what their legal obligations are if their petition for bankruptcy is approved by the court.
  • Making sure that the client complies with all the laws and procedural requirements associated with the bankruptcy process, such as attending the mandatory credit counseling courses and the 341 meeting of the creditors.
  • Gathering, drafting, and reviewing all documents and any evidence pertaining to the bankruptcy matter.
  • Offering legal counsel on any questions or concerns that a client has prior to, during, and/or after the bankruptcy petition is filed.
  • Explaining the rights and protections that a client has under the relevant bankruptcy laws.
  • Assisting the client with further bankruptcy issues, such as resolving disputes with creditors, converting their case to a different chapter of bankruptcy if necessary, and stopping creditors from harassing them after they declare bankruptcy.

In addition, a bankruptcy attorney can provide legal representation for a client during bankruptcy court hearings, a client’s 341 meeting of the creditors, and/or any other proceedings or conferences related to a bankruptcy case. 

What are the Advantages of Hiring a Bankruptcy Lawyer?

There are numerous advantages to hiring a bankruptcy lawyer when filing a petition for bankruptcy. Some of those advantages may include the following:

  • Having a legal professional present to ask questions about a case and to explain various bankruptcy laws or requirements;
  • Complying with bankruptcy requirements during the initial filing, so that it does not need to be re-filed a second time and also to help prevent a court from dismissing a petition due to error;
  • Having a knowledgeable legal expert to discuss important details with, such as the pros and cons of filing for bankruptcy, the right chapter of bankruptcy to file for, whether any of a client’s debts can be discharged, and if there are any property exemptions the client should take advantage of; and
  • Finally, having someone who has experience and knowledge to assist a client in navigating the overall bankruptcy process. 

Should I Hire a Bankruptcy Lawyer?

Deciding whether or not to file for bankruptcy can be a tough decision to make without the assistance of a legal professional. There are many chapters of bankruptcy to choose from and one mistake can result in your entire case being dismissed by a federal bankruptcy court. Therefore, it is strongly encouraged that you hire a local bankruptcy lawyer for further legal guidance on your bankruptcy matter.

An experienced bankruptcy lawyer can assist you in weighing the risks and benefits of filing for bankruptcy, and can help you in selecting the proper chapter of bankruptcy based on your personal circumstances. They can also aid you in drafting and filing the legal documents required to file for bankruptcy in court. 

Your lawyer can also provide representation at any legal proceedings associated with your bankruptcy case, which can include attending the 341 meeting of the creditors if you feel you need their support at the meeting. In addition, your lawyer can handle any issues or disputes that arise in connection with your bankruptcy filing. Lastly, they can explain the next steps you must take depending on if the court approves or denies your petition for bankruptcy.

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