Skip to main content

Search

Access to Utility Service: ARKANSAS

126-03-003 Ark. Code R. §§ 6.01 to 6.20 (electric, gas, water) (LexisNexis); 126-03-014 Ark. Code R. §§ 6.01 to 6.16 (telephone) (LexisNexis)

Consumer Bankruptcy Law and Practice: 16.1 Introduction

A topic of more than passing interest to private attorneys representing consumer debtors is the matter of attorney fees. While the general factors governing decisions concerning what fees to charge and how to collect them can be very similar to those for other types of legal matters, bankruptcy attorney fees are unusual in several ways. Similarly, while the duties of debtors’ attorneys are generally coextensive with those of attorneys representing other clients, there are special bankruptcy provisions of which they must be aware.

Consumer Bankruptcy Law and Practice: 16.2.1 The Basic Fee

As in any other matter, it is very important for the attorney and client to discuss and have a clear understanding of fee arrangements as early as possible. Normally, this discussion occurs at the first interview with the debtor.

Consumer Bankruptcy Law and Practice: 16.2.2 Amounts Typically Charged

While there are great variations in the amounts charged to cover basic services, the range in chapter 7 cases is usually from $1000 to $2000 and many courts set an informal limit between $1500 and $2500.18 Some attorneys and courts consider it appropriate to add a small increment to this fee in joint cases19 or when other complications make the case more difficult than average to prepare.20 Similarly, in chapter 13 cases, basic fees generally range from

Consumer Bankruptcy Law and Practice: 16.3.1 Overview

One aspect of attorney fees in bankruptcy that is somewhat unusual is the close court supervision of the fees charged. In addition, monitoring and, when appropriate, commenting upon attorney fees applications is one of the primary duties of the United States trustee’s office.53 This supervision of attorney fees in bankruptcy arises mainly from an unfortunate history of abuse and overreaching by the bankruptcy bar.

Consumer Bankruptcy Law and Practice: 16.3.2 Disclosures Required

Hence, both the Code and the Federal Rules of Bankruptcy Procedure have strict requirements for disclosure of all fees. Section 329(a) requires any attorney who represents a debtor in a bankruptcy case, or in connection with a bankruptcy case, to file a statement of all compensation paid or agreed to be paid in connection with services rendered within one year prior to filing, or to be rendered, that are related to the bankruptcy.

Consumer Bankruptcy Law and Practice: 16.3.4 Making a Record on Fee Issues

Regardless of the way the fee request comes to the court’s attention, the matter must be given the same type of careful consideration required by the rules for any other type of proceeding.94 The bankruptcy court must make known its specific concerns about the fee so an attorney may attempt to address them.95 A final (as opposed to interim) order on fees is a final appealable order.96 In cases likely to be appealed, all parties must be careful to ensure

Consumer Bankruptcy Law and Practice: 16.4.2 Procedure for Obtaining Payment of Fees Through the Plan

The Bankruptcy Rules provide that an attorney who seeks compensation for services from the estate, that is, through the plan, must file an application for those fees including a detailed statement of services rendered, the time and costs expended,119 and the amounts requested.120 The application must also be transmitted to the United States trustee.121 Some courts require a great deal of specificity in such statements.

Consumer Bankruptcy Law and Practice: 16.5.1 Overview

An additional source of attorney fees often overlooked by many bankruptcy practitioners is the opposing party.133 Most practitioners are aware of the Bankruptcy Code provisions that provide for or permit attorney fees to be awarded to prevailing debtors in certain circumstances, such as proceedings to enforce the automatic stay,134 to enforce the discharge injunction,135 to enforce the proof of claim and mortgage disclosure rules,

Consumer Bankruptcy Law and Practice: 16.5.3 Consumer Protection Statutes

Also common, but all too often neglected, are opportunities in bankruptcy cases to bring actions under various consumer protection statutes providing for attorney fees. A thorough familiarity with debtors’ rights under these statutes can result in substantial, additional fees for bankruptcy attorneys, not to mention important benefits for their clients.

Consumer Bankruptcy Law and Practice: 16.5.5.1 Rule 9011

Fees may be awarded to debtor’s counsel when imposed as a sanction against an opposing party or counsel for violation of Federal Rule of Bankruptcy Procedure 9011. Rule 9011 does not function primarily as a fee-shifting provision.

Consumer Bankruptcy Law and Practice: 16.5.6 Other Fee-Shifting Provisions

Finally, it must be remembered that almost any type of action relating to the debtor’s affairs may be brought under the expanded jurisdiction of the bankruptcy forum.193 It is possible that any one of the wide array of other state and federal fee-shifting statutes could be applicable in a particular case.