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Are There “Hidden Fees” in Your Representation in a Bankruptcy? And Will You Return My Phone Calls?

I sure hope there are no hidden fees! I tried hard to put ‘em on a billboard and have a skywriter spell ‘em out in our scary five-page retainer agreement!

What I try to do when I meet with a client is to figure out how much time, effort, and risk is involved in that particular consumer bankruptcy case, or that small business bankruptcy case, or that unique sui generis case. One size retainer really doesn’t fit all, because I have a few clients who have ten thousand dollars in unsecured debt, and some who have twenty million.

Wouldn’t be fair to charge everybody the same amounts, you know? Because the work can be so different in the different cases. Doctor’s bankruptcy cases, and lawyer’s, and dentist’s, always take far more time than my routine consumer cases, and they always involve at least one Rule 2004 Exam.

I’ve gotten pretty good at predicting the level of complexity in a case. And then I quote a retainer, and I try to get the project done inside that retainer amount. Remember that there is also a filing fee (currently $299 in the District of Arizona for a Chapter 7 Bankruptcy for either a single or joint Chapter 7 filing) and you’re also on the hook for the pre- and post- consumer credit counseling, which is pretty minimal.

My memory (and I might be wrong, and if I am, Heidi will remind me) is that I haven’t needed to send a supplemental bill in a consumer bankruptcy case in the last three years or so.

That does NOT include a fee or a cost for adding a creditor you didn’t list in the first instance, because that involves extra work for my staff, and a fee I have to pay to file to the Bankruptcy Court for your amendment; so list all your creditors in the first instance, and that won’t be an issue. If we have to amend, you’ll need to pay me more to add the creditor.

What I can’t control is the chance that a creditor will file a Complaint to Determine Dischargeability against you. It happens in a few cases every year.

Generally, those fall into three categories: a credit card where you’ve charged more than five grand in the three months prior to filing, a loan application where you fibbed like a doggy to get the loan in the first place, or a jilted sweetie who loaned you twenty grand and is feeling, you know, jilted. And cranky.

In those sorts of cases, for at least the last three years, I’ve been able to settle ‘em with a phone call or email, so I haven’t needed to charge extra to fix ‘em.

Don’t count on that result if it happens in your case. Results not typical, right? 

Actually, Heidi settled one by mistake!

Heidi is a paralegal, not a lawyer. She doesn’t negotiate on your behalf; if there’s a negotiation in your case, either I’ll do it, or Nicolina (my brilliant associate), or you will, depending on the facts.

But Heidi was on the line with opposing counsel who had made a demand on our client, who had instructed us to file on the twenty-fifth, even though he’d specifically asked about and gotten written instructions about not using his credit card within 90 days of filing.

And he had used the credit card to the tune of ten grand or so on day 89 prior to filing. AAAAAAAAAARGGGGGGGGGG!

And Heidi, who is the most authentic human being in the world, was just shooting the breeze with opposing counsel (I don’t remember why they were talking; maybe he had called about an Extension to file the Complaint), and she said, “You know, I was surprised that you made that demand in the first place, because the client is about two hundred years old, and only has social security as income, and is selling his dog to buy food for his cat,” or some such thing (and it was all true, of course, because Heidi won’t lie!).

And opposing counsel said, “Oh, heck. Nevermind! I’ll just close my file on this claim. Have a great day, Heidi!”

And he did, and she did, and we did, and the client did.

p.s. there are other things that can happen in your bankruptcy case that are a pain. One is that you could get smacked with an objection to an exemption, or even a motion to dismiss for failure to pass the means test. Very small levels of risk, but both happen from time to time.  You need to be prepared for an objection to an exemption, just because trustees in Arizona started deep mining bankruptcy files for purposes of their economic survival, during The Great Bankruptcy Drought of ’06.

WILL YOU RETURN MY PHONE CALLS? WELL, MAYBE. 

p.p.s. You can force me to charge you more, by the simple expedient of calling Heidi or Nina or me nine times a day every day until we file for you. Some clients have to wait seven months to file until it’s absolutely clear that they pass the means test. Some of those have emotions, and try to use phone calls with Nina or Heidi as therapy, which is a cruel misuse of their time. Some clients wisely cluster their questions ten to an email, and they get those dealt with efficiently.

And those clients get a gold star on their bankruptcy folders!

Heidi and Nina are the folks in the office who answer ordinary questions that you can’t figure out even after you read my long “how to fill out your forms” post, and when you wonder what’s going to happen in your bankruptcy with your pet aardvark Jimmy. If you are able to stump Heidi or Nina, the question gets booted upstairs to me.

And by the way, I am not All-Knowing, even about bankruptcy law in Arizona. I have a pretty good idea how these things work after my year drafting the Local Rules of Court in law school, and my two years working for Bankruptcy Judges in the District of Arizona, and thirty years of experience in the bankruptcy trenches as a bankruptcy specialist, but if you have a five-hundred page annuity document, don’t expect me to understand its terms by intuition or telepathy.

In general, we all prefer that you send clustered groups of questions by email, because then you can get answers in the ordinary course of business in a day or two, and you might even get faster turnaround, but don’t plan on it. Don’t be like one of our clients, and send 120 emails in a month. And she complained that the last three didn’t get answered as fast as she wanted!

Seriously.  Cluster your questions. Make it one email a week with twenty questions. Do not overwhelm poor Nina and Heidi by being Bankruptcy Columbo, and sending twenty questions a day for seven months; there are more of you than there are of us.

If you have an emergency, of course, and it’s a real emergency, put EMERGENCY on the subject line of the email and send it to everybody on my staff and me. And it will get treated as an emergency.

But don’t do it a dozen times; then you’re the boy who cried “Wolf!”

Some people prefer face-to-face meetings; you can schedule those by e-mail, and please make sure you set out the agenda of the meeting with as much precision as you can, so we can get all your questions answered during our time together.

Some people prefer communicating by e-mail, and that generally works best, as long as you don’t expect that you’ll hit “send” on a routine bunch of questions and get ten-second turn-around time. If you don’t get a response to a series of routine questions in two or three days, send ‘em again with the notation in the subject line, “Second Request for Information”. Doesn’t happen often, but when it does, it generally means that Heidi thought I’d answered it, or Nina, or some such.

Some people strongly prefer telephone calls as a mode of communication, and we can make you moderately happy, if you email in to schedule a fifteen minute call. In general, however, I get pretty darn frustrated when I try to return a phone call, and I get voicemail, a blocking interface, and a partridge in a pear tree. So if we do make a telephone appointment, try to be there and in an answering mood when I call you, because I’m old, and I want to keep my blood pressure down.

p.p.p.s. if you send an “emergency” email at 4 in the morning, do not expect a response at 4:01am. You won’t get one, not even by 4:03am.

Because I need my beauty sleep.

Really.

p.p.p.s. Bear in mind that some days we get a ton of phone calls from creditors who are confirming that you hired us. You want us to respond to those so they quit bugging you and start bugging us. So sometimes you’ll call and get an answering machine. Doesn’t mean we aren’t working our behinds off, and it doesn’t mean we don’t love you.

Probably means we’re fielding creditor phone calls so that you don’t have to.

And at some point I’ll probably be forced to install the dreaded “Press 1 if you’re a client, press 2 if you’re a steenkin’ creditor, press three if you’re a trustee….”, but I sort of hate those myself, so I’m trying to avoid it.

I’ll let you know how that works out.

.

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