Should Attorneys Fees in Chapter 7 be Non-Dischargeable – Your Chance to Chime in

This is a post from atty Danny Gill on Facebook.
LOOKING FOR COMMENTS. It has been suggested to the ABI Commission on Consumer Bankruptcy that Congress make attorneys fees for filing a Chapter 7 non-dischargeable, to allow lawyers to be paid over time for filing a 7.  I’m looking for comments on the issue, either for or against that fix or suggesting other ways more very poor people can have access to Chapter 7 with no (or only a little) money down.  If you’re interested write me at dgill@bna.com. Thanks.

2 Replies to Should Attorneys Fees in Chapter 7 be Non-Dischargeable – Your Chance to Chime in

  1. I understand the need to create an alternative to fee-only chapter 13′s to allow debtors who need to file immediately the option to do so with a chapter 7. Making the attorney fee non-dischargeable, however, doesn’t really give it any teeth. If the debtor doesn’t pay, so what? Is the attorney really go to sue the debtor, garnish wages, levy bank accounts, lien property, etc? It’s not good practice. We’d be bad mouthed all over the place and ethical considerations remain under that model.

    However, If it’s made non-dischargeable AND the case remains open (administratively) for 6 months to allow the debtor to pay the attorney fees, THAT gives the policy some teeth. If the debtor does not pay, case is closed without a discharge. It could be reopened when paid, similar to the exit counseling issue.

    This is an issue we must address. We need good debtor practitioners. We cannot continue to encourage pro se filings in the CDCA. We have the highest rate nationwide and it’s doing more harm than good because debtors are losing property, and rights because they had little to no counsel before filing. The clinics help fill out forms. The pro se legal advice is scant, uncreative, and rushed. Access to justice does not equal justice. Good intentions can sometimes backfire. Just my humble opinion.

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