Bankruptcy Attorneys Don't Charge That Much

If you just hired a bankruptcy attorney you probably disagree with this title.  However, in comparison to the rates charged by attorneys in other practice areas, consumer bankruptcy attorneys don't charge that much. DUI attorneys: easily $4,000-$10,000 per case; personal injury attorneys: 30% of the tens of thousands of dollars recovered; divorce attorneys: $250 an hour for hundreds of hours; bankruptcy attorneys: $1,500-$4,000.  Moreover, a percentage of the chapter 13 bankruptcy attorney fee is payable over 3 to 5 years.  Hence, higher bankruptcy attorney fees come with built in financing, something atypical in the realm of attorney fees.

Most bankruptcy clients understandably balk at a $2,500 fee quoted for a chapter 7 bankruptcy, but compared to the rates charged by attorneys in other practice areas this seemingly high rate is anything but.  If the attorney actually drafts the bankruptcy documents and responds to client calls throughout the bankruptcy case, the attorney will likely compensate themselves at an effective rate of approximately $100 an hour.  Now, many bankruptcy attorneys do not actually draft the bankruptcy documents or personally respond to every client call.  This prevalent bad behavior that frustrates clients is a necessary evil of a high volume practice with comparably low fees per case.  Chapter 7 and 13 cases pass through a firm supply chain where tasks are performed by the lowest paid individual competent to handle the task.  Bankruptcy attorneys who are the highest paid individuals in the firm naturally avoid time intensive tasks in low fee cases and instead rely upon cheaper paralegals or secretaries to handle time intensive matters.  The consequence of this assembly line with minimal attorney involvement is often poor customer service as evidenced by the mounting frustration experienced by many clients of "bankruptcy petition mills."

The bottom line is that good bankruptcy attorneys who are generous with their time are often among the most expensive bankruptcy attorneys.  Cheap attorneys may charge less, but will need to reduce their role in each case and utilize lower paid staff to turn a profit.

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