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Simple question about BANKRUPTCY

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Simple question about BANKRUPTCY

Old 02-07-2018, 03:42 PM
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Default Simple question about BANKRUPTCY

The TV is full of ads about attorneys that handle bankruptcy proceedings, which suggests that these guys are making a ton of money from people that......have.....no......money????

The question I have is: who pays the attorneys?

If somebody can't pay their bills, where do they find money to pay the attorney, and how much does a bankruptcy cost? Same for everybody, or percent of what they screw creditors for?
Old 02-07-2018, 03:46 PM
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Originally Posted by bamaboy473 View Post
The TV is full of ads about attorneys that handle bankruptcy proceedings, which suggests that these guys are making a ton of money from people that......have.....no......money????

The question I have is: who pays the attorneys?

If somebody can't pay their bills, where do they find money to pay the attorney, and how much does a bankruptcy cost? Same for everybody, or percent of what they screw creditors for?
you have to pay the attorneys up front... prices probably vary but i've seen an average around $2500...

Last edited by mystery; 02-07-2018 at 04:06 PM.
Old 02-07-2018, 03:52 PM
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I have am attorney as a client and he says he puts BK filers on payment plans and has trouble collecting (imagine that).
Old 02-07-2018, 03:52 PM
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Lawyer gets money up front.
Old 02-07-2018, 04:56 PM
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Originally Posted by YFMF View Post
Lawyer gets money up front.
...so can we assume that the attorney's fee comes from their clients further screwing over the people that they owe money to?

That doesn't sound fair. What does the attorney do to earn his fee?
Old 02-07-2018, 04:57 PM
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Friend is a lawyer, he said you would be amazed that people with no money can come up with the cash like nothing when in trouble.. There's always a way..
Old 02-07-2018, 06:34 PM
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Same as the debt consolidation companies. They take a % of the debt written off.
Old 02-07-2018, 06:38 PM
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Being a landlord, we're on the short end of the stick when people decide to do this, I guess. Is there a better way to write leases that get's around bankruptcy?

My understanding is that past debt is forgiven,but future debt is not...so as long as I keep them paying as planned, I'm ok with collecting even if they declare bankruptcy, right?
Old 02-07-2018, 07:44 PM
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As a landlord, you would have to wait until the first meeting of creditors to ask their intentions. They would have to pay past and current rents or you have the right to file eviction proceedings. If paid, they would automatically be reaffirming your rental contract.

Bankruptcies have changed over the years. The court now tries to run individuals thru Chapter XIII Wave Earned Plan. When they don't or won't comply, they usually will be allowed to enter Chapter VII Straight Bankruptcy.

Some bankruptcy attorneys simply make a fortune--filing huge numbers of debtors. And they collect on front end prior to filing. For the most part, they have all the paperwork in a computer and just change the names, addresses and creditors on the petitions. It is a pretty simple part of the law to practice.
Old 02-07-2018, 07:49 PM
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As short of an answer as I can give without too many derailments, because there are hundreds of ways the general cases can differ...

In a chapter 7 case the debtor generally pays attorney up front. Can’t be on credit, must be cash. Because the debtor is about to wipe out all unsecured debt, they have quit paying their unsecured creditors for a month, 2 months, or longer to save up for the costs of filing the bankruptcy.

In a chapter 13 filing, the debtor can’t file a chapter 7 because he makes too much on a monthly basis or has more assets than can be protected in a chapter 7 case, so in the chapter 13 case the debtor is put on a 5 year (3 years in some situations) repayment plan where the unsecured creditors (and included secured creditors) are paid back a certain percentage or all of the debt, depending on the repayment plan, over the 5 year plan. So a lot of attorneys in a chapter 13 case take a portion of their fee through the payment plan. All of the debtor’s disposable monthly income goes to the bankruptcy trustee who ensures everyone is paid according to the payment plan. If debtor fails to pay, their case is dismissed and creditors are free to pursue further collection efforts.
Old 02-07-2018, 08:00 PM
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Originally Posted by Bamaman View Post
As a landlord, you would have to wait until the first meeting of creditors to ask their intentions. They would have to pay past and current rents or you have the right to file eviction proceedings. If paid, they would automatically be reaffirming your rental contract.

Bankruptcies have changed over the years. The court now tries to run individuals thru Chapter XIII Wave Earned Plan. When they don't or won't comply, they usually will be allowed to enter Chapter VII Straight Bankruptcy.

Some bankruptcy attorneys simply make a fortune--filing huge numbers of debtors. And they collect on front end prior to filing. For the most part, they have all the paperwork in a computer and just change the names, addresses and creditors on the petitions. It is a pretty simple part of the law to practice.
I wouldn’t say it is that simple and easy to practice. Many attorneys have had major malpractice claims against them and lost bar licenses for failing to properly protect property, or failing to properly include creditors. There are literally thousands of minor intricate rules that must be followed, and constantly changing, that the attorney has to be mindful of, because one wrong entry in the petition and the client can lose a house. It is a minefield, which is why few new attorneys delve into the practice and it is very time consuming to learn and master. But those that do can make a very good living doing it.

And yes there is software for it to prepare the petitions, but that is like saying an accountants job is simple when it comes to filing someone’s business tax returns. They just plug in some numbers and names and voila out pops your returns. Yeah after hours of review of documents, account statements, property, deed, lien, general execution docket searches, meetings with clients to hammer home ramifications of what they are doing, etc.
Old 02-07-2018, 08:06 PM
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Funny to note that the ad at the bottom of the page for this forum for me is now an ad about a free bankruptcy relief review. Never had one of those pop up until I clicked on this thread. Lol.
Old 02-08-2018, 05:37 AM
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I think most of these adds are for people that can't do math. My former neighbor (lost his house in foreclosure, imagine) came home one talking about how good he did that day declaring bankruptcy. He had 2 bills, that's right 2 a house payment of $686 and motorcycle of $240 for $926 a month. After bankruptcy filing he had to pay the courts $1180 a month.
Old 02-08-2018, 05:43 AM
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Originally Posted by bamaboy473 View Post
Being a landlord, we're on the short end of the stick when people decide to do this, I guess. Is there a better way to write leases that get's around bankruptcy?

My understanding is that past debt is forgiven,but future debt is not...so as long as I keep them paying as planned, I'm ok with collecting even if they declare bankruptcy, right?
Probably unlikely in the case of rent, but if someone in bankruptcy proceedings pays a bill improperly (not in compliance with the legal process during bankruptcy), the court can "claw back" that payment.
Old 02-08-2018, 05:44 AM
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Originally Posted by bamaboy473 View Post
The TV is full of ads about attorneys that handle bankruptcy proceedings, which suggests that these guys are making a ton of money from people that......have.....no......money????

The question I have is: who pays the attorneys?

If somebody can't pay their bills, where do they find money to pay the attorney, and how much does a bankruptcy cost? Same for everybody, or percent of what they screw creditors for?
You do, period. It comes off the top and your creditors get what's left. Oddly bankruptcy laws were written by attorneys.
Old 02-08-2018, 05:55 AM
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Originally Posted by bamaboy473 View Post
...so can we assume that the attorney's fee comes from their clients further screwing over the people that they owe money to?

That doesn't sound fair. What does the attorney do to earn his fee?
The attorney turns you over to your creditors with an "agreement".

It's not a good deal.
Old 02-08-2018, 05:58 AM
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Originally Posted by mikefloyd View Post
They do, period. It comes off the top and their creditors get what's left. Oddly bankruptcy laws were written by attorneys.
fify

...gives meaning to the old phrase, "...robbing Peter to pay Paul (the attorney)"

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