CONTRACT FOR LEGAL SERVICES
Chapter 13
The undersigned client(s)
agree to employ the law firm of
Fee
The client agrees to pay a
total retainer of $________ for this firm's representation in a chapter 13
bankruptcy case. Of this amount $_______
must be paid prior to the filing of the case, with the balance of $_______ to be
paid under the chapter 13 plan. The balance
due from the total retainer must be paid in full by cash, money order or
cashier's check when the questionnaire is returned. In addition to the retainer, the client
agrees to pay an hourly rate of $375 per hour for the services of
If the case is converted or
dismissed the client shall remain liable for the total fee due. Further, by signing this contract client
directs the chapter 13 trustee to issue any refund upon dismissal or conversion
directly to counsel for payment of the balance of any fees due. However, the any fees owed to the firm prior
to the entry of this contract are hereby waived.
The fee described above is in
addition to the costs described below, and both the initial fee shown above and
costs must be paid prior to the filing of the bankruptcy. The client should always request a written
receipt for all payments made to the office.
The representation is limited
to representation in the general bankruptcy case only. The client should discuss any state court
lawsuits with the attorney during the initial conference, and make written
arrangements regarding the lawsuit at that time. The law office will not be responsible for
taking any action regarding state court lawsuits absent a written agreement to
the contrary. If any dispute arises
related to accounting (for example with the IRS or balance due on mortgages),
or valuation, then the client shall be expected to retain a professional
accountant or appraiser to provide these services. If matters arise outside of
bankruptcy expertise, where there is extensive litigation regarding
nonbankruptcy issues, the client may be requested to employ counsel
specializing in such other areas.
Costs
The client agrees to pay all
court costs in this matter, including filing fees, court reporter bills,
postage costs, or charges for federal express or similar services. The client shall pay the sum of $281.00 as the filing fee in this
matter prior to the bankruptcy being filed.
All costs must be paid before the law office will make the related
expenditure or order any transcript. Any
costs for an appeal must be paid prior to the notice of appeal being
filed. Counsel shall not be obligated to
represent client in any appeal or adversary suit filed by the client if counsel
does not believe the adversary or appeal is warranted.
The
firm is now filing
all cases electronically, which requires the law firm to pay the filing fee by
debit or credit card. While the client
will pay us the fee by money order or cashier’s check, the client recognizes
that there may be some minor ‘premium’, such as frequent flier miles, awarded to counsel or the law firm from the
credit card company based on the total monthly charges, and consents to the
firm retaining any such premium. This
also applies to charges for ordering credit reports.
Additional fees
The client agrees to pay
additional fees if the law office provides the following services to the
client. The client understands that
these additional services are not required in most cases and that none of these
fee will be incurred without first informing the client, and allowing the
client the option of declining such services.
I. Credit Reports
We
are now able to order credit reports online from all three credit bureaus for
clients, to insure that all creditors are listed on the bankruptcy case. The fee for this is $35 in an individual case, and $70 in a joint case. This fee would need to be paid prior to
ordering the credit reports. You should
still list creditors you owe on our forms to help insure that everyone is
listed. You should provide us with all
addresses the creditor has provided to you within the last three months, or as
many of such addresses as you have available.
Additionally, complete addresses for all collection agencies must be
listed as well as the address for the original creditor. This information should be available on the
monthly statements from the creditors or from letters from collection
agencies. If the
creditor has shown an address for correspondence (as opposed to a billing
address), the correspondence address must be listed.
II.
Valuation of assets
The questionnaire
provided will ask you to value your property.
Federal law requires us to inform you how to value the property at
replacement value. If you would replace
the property by purchasing other similar used property at a flea market or from
ebay, then you should value the property at what you
would expect to pay for items in a similar condition at a flea market or from ebay. It is not
clear whether the value of your household goods is at replacement or garage
sale value, and you should discuss this with us if you believe there is a
substantial difference in such values.
If you are unable to come up with values yourself, then we can give you
the name of an appraiser to go examine and value the property, but you would
need to pay the appraiser a separate fee for such appraisal. The firm will then determine which of your
property is exempt from creditors and the estate.
III. Changes, additions
or deletions.
If the client wishes to change
information on the petition after it has been typed, if the item changed is
different than listed on the questionnaire, then the charge for such changes
shall be included in the hourly fee calculation described above. The court's filing fee for changing the
address of creditors or adding creditors still must be paid prior to the filing
of such change. Therefore, it is
important that the client list all information on the questionnaire correctly,
and list complete addresses for all potential creditors as well as any
collection agencies or attorneys on the initial questionnaire.
The client should review the
petition before it is filed, and make any corrections at that time. It is very important that all creditors and
all assets be listed on the petition.
This includes the address of the creditor, and separate addresses for
any collection agents or attorneys. Any
companies through which anything or any property is leased must be listed. If, for any reason, a creditor is not on the
petition filed with the court, or if the address for the creditor is incorrect,
that debt may not be eliminated by the bankruptcy.
IV.
Adversary and contested proceedings
If an adversary proceeding is
filed in the bankruptcy court against the client, or if the client wishes this
firm to file an adversary proceeding against someone else, any such additional
fees shall be included in the fee calculation described above.
V.
Conversion
If the client wishes to convert
the case to another chapter after it has been filed, there will be an
additional fee required before the conversion can be filed. Fee arrangements for the conversion must be
made at the time of the conversion.
VI.
Lien Avoidance
If when you borrowed money
from a creditor, you gave them a list of furniture in the house, they probably
took a lien on that furniture. Unless
they financed the furniture, the law firm can file a motion with the court to
eliminate this lien on the furniture.
This motion should be filed during the first month of the
bankruptcy. If you have a creditor that
has such a lien, you need to mail a copy of the agreement with the creditor, or
at least a list of the furniture given on the list to the creditor to the law
firm, along with a copy of a bill or other document from the creditor showing
the complete name of the creditor.
Alternatively, the client may
either continue paying that debt to the creditor, or may take the risk that the
creditor will show up later to repossess the items.
If a creditor has a judgment
against the client, and that judgment has been recorded in the county court
public records, then the law firm may be able to file a motion to eliminate
this lien from the property. If any
suits were filed against the client that went to final judgment, the client
should check the county court records to see if the judgment is recorded, and if so, should make a copy of it from the
property records and set an appointment with the law firm to bring that copy to
the attorney. This motion should be
filed within the first month of the bankruptcy.
The client will be responsible for recording this judgment in the
property records.
VII. Valuation
If a creditor financed the
purchase of furniture, appliances, jewelry or electronics; or if a lien on a
vehicle or mobile home was given to secured a debt to a creditor, then it is
not possible to eliminate the creditor's lien without paying them
anything. In this situation, the client
has four choices: either keep making payments to the
creditor; work out a deal directly with the creditor to keep the merchandise;
take the risk that the creditor will repossess the items; or pay us to have the
court value the items. A valuation is a
proceeding where we have the court determine the value of the merchandise
purchased from the creditor, and then this value would be paid to the creditor
through the chapter 13 plan. Once this
money is paid to the creditor, the creditor would no longer have the right to
repossess the merchandise.
VIII.
Stay Litigation
Generally, all house and car
payments will be paid through the chapter 13 plan. If the payment is not paid through the plan,
we have no control over fees or costs charged on the loan. Be sure you understand the chapter 13 plan we
prepare and that it includes all mortgage and car payments. Discuss any questions with counsel regarding
this prior to filing.
IX.
Missed Hearing
There will be a meeting of
creditors about one month after the bankruptcy is filed. The client will receive a notice from the court
giving the time and date of this hearing.
This notice should be received between one and two weeks after the case
is filed. If the client does not receive
such notice within three weeks after the case is filed, the client should call
our office or the bankruptcy court to get the time and date of this meeting.
The client must attend the
meeting of creditors (if the case is filed jointly by husband and wife, both
must attend the meeting). The law office
will arrange to have an attorney representing the clients at this meeting. If the client does not appear at the meeting,
then the case may be dismissed.
X.
Reaffirmation
Some creditors may request that the
client sign a Reaffirmation Agreement.
This agreement allows the creditor to sue the client for the debt
despite the bankruptcy. While creditors
may orally promise to allow the client to keep a credit card or improve the
credit report, unless these promises are in writing, they are no good. Our office almost always recommends against
signing the agreements in that they do more harm than good to the client. Unless noted to the contrary on this
agreement, counsel will not notify the client when a creditor requests a
reaffirmation of a debt.
XI Mortgage Modification
It
may be possible to seek a modification of the terms of the mortgage in the
bankruptcy. Under this program the
mortgage payment is generally 31% of your total income before taxes or other
deductions. The mortgage will generally
not reduce the balance owed, but may reduce the interest rate as low as 2% and
possibly extend the term of the mortgage.
Substantial documentation will be required, and a mediation conference
as well as a fee to the mediator and additional attorneys fees for the mediation. The fee for the mediator would need to be
paid up front, in an amount around $300-500.
Our attorney’s fees for the mediation can be paid through the chapter 13
plan. There is no guaranty that
mediation will be successful.
XII.
Appointments
Since appointments are set for
1/2 hour each, and potential clients may be turned away due to calendaring
concerns, unless the appointment is cancelled 24 hours in advance, a 1/2 hour
charge will still be made whether or not the client appears for the
appointment. No charge will be made for
the initial appointment with the client.
While weekend appointments are usually available in the
XIII.
Lawsuits in state courts
If the client is suing
someone, or anticipates suing someone in state court, it is necessary to get
bankruptcy court approval to continue that suit, and to approve any settlement
of that lawsuit. You generally may continue
to use the same attorney as you had been using in the lawsuit before the
bankruptcy was filed, but there must be an order from the bankruptcy court
specifically authorizing that attorney to continue to represent you. Please discuss this matter with me if you
have any such suits.
Discuss any suits that are
filed against you with the attorney. The
bankruptcy must be filed prior to the foreclosure sale or tax deed sale in
order to retain the house. Both the
schedules and the petition (not just this contract) but the actual petition
form that the office prepares from the questionnaire must be signed. If a summary judgment is entered in the
foreclosure, it will usually no longer be possible to contest the creditor’s
allegations of how far behind payments are or to fight their requested
attorneys fees and costs. The client
should bring a copy of any lawsuit papers to any meetings with the attorney.
XIV.
Time to file:
The price for the bankruptcy
shown above is good for three months from the date of this contract. After this date, we will apply any payments
made to the new price, but the price may increase after that date.
If the balance of the fee is paid, or
the balance of the information needed to file the bankruptcy is provided less
than one full business day prior to the deadline to file the bankruptcy, and
additional fee of $500.00 shall be required.
If the balance of the fee is
paid, or the balance of the information needed to file the bankruptcy is
provided less than four full business days prior to the deadline to file the
bankruptcy, an additional fee of $150.00 shall be required.
Any day on which the clerk's
office at the bankruptcy court is open and staffed shall be considered a
business day.
Congress also may change the
law, and we may have little or no advance warning of such changes. If the law changes, you may not be able to
file bankruptcy, or your monthly payment may need to be significantly
higher. Therefore, it is important to
try to return the paperwork as soon as possible so that the case may be filed
before any changes in the law.
XV. Change of
circumstances after case filed
If some problem arises after
the case is filed that you may not be able to afford payments to the court or
to a creditor you are supposed to pay, set an appointment with me to discuss
the alternatives. Also, if you obtain
property from lawsuits, inheritances, divorce settlements, lottery, or
otherwise after you file you should set an appointment to discuss whether and
how this would be disclosed.
The document form we use when
we file the case provides that property subject to the Court’s protection and
control remains subject to the court’s protection and control until the case is
over. We do this to protect you and your
property from any debts that arise after the case is over and to help insure
that the mortgage company and other creditors do not charge excessive fees or
other charges after you file the case.
However, this could result in an increased possibility that property you
obtain after the court approves the plan (which occurs approximately 6 months
after the case is filed) will need to be paid to the trustee. The standard form can be changed if the
client so desires, and the client should discuss this with counsel if they wish
to change this provision.
XVI. Audits
The Office of the U.S. Trustee is anticipated
to be performing random audits of bankruptcy cases filed, requiring
documentation supporting the items shown in the case. To the extent counsel or staff has to spend
significant additional time or resources in responding to or representing the
client in such audit, the additional time will be billed at the hourly rates
shown above.
XVI. Credit
Counseling/Financial Management
The law requires that you take a credit
counseling course at least one day prior to the day you file the case, and take
a financial management course before the case is completed – to be safe within
2 months after you file the case. You
will need to pay fees for these courses directly to these agencies. While the agency usually forwards the
certificates that you completed the courses to our office, you should confirm
that we received them within a couple of days after you complete the
course. If the credit counseling course
is not done, we cannot file the case. If
the financial management course is not done and filed with the court by the
time the court closes the case, you will have to pay a substantial fee to
reopen the case.
XVII
Closing of Files
This office may destroy or
otherwise dispose of the client's file six months following the notice of
discharge from the court. The client may
pick up any court papers from the file six months after the discharge from the
court. The client should not provide our
office with originals of any important documents, but instead should photocopy
any documents requested. This office
will not be responsible for any original papers given it.
XVIII.
Cancellation of case
The client may cancel
representation by the end of the business day following the date of this
contract for a full refund. Otherwise,
all monies paid by the client to the law office shall be applied first to
payment of fees, and then to payment of costs.
The initial fee is a non-refundable advance payment for the law firm's
commitment to file a chapter 7 bankruptcy, and once paid, is the property of
the law firm. No refunds shall be issued
absent written arrangements to the contrary on this page.
Dated: ____________________ Dated:
____________________
____________________________ ___________________________
Client for Michael Barnett, PA
____________________________
Client
Attorneys fees: $______________
Costs: $______________
Amount
Paid $______________
Amount
Due $______________
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Special
Arrangements:
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Notes: Vers. 11/11 TPA