Understanding bankruptcy attorney billing
Bankruptcy attorney fees are subject to court oversight. Understanding how fees work and how to review them protects your interests.
Fee disclosure requirements
Under 11 U.S.C. Section 329, your attorney must file a disclosure statement with the court detailing all compensation received or agreed to be received in connection with your case. This is public record and appears on the court docket.
What to check
- Does the fee match your agreement? -- Compare the court disclosure to your retainer agreement
- Were additional fees charged? -- Some work may be billed separately. Check if these were disclosed
- Payment timing -- In Chapter 7, most fees are paid before filing. In Chapter 13, fees may be paid through the plan
- Fee applications -- In Chapter 13, attorneys may file fee applications for additional work. These require court approval
Court oversight of fees
Bankruptcy courts have the authority to review attorney fees and order disgorgement (return) of excessive fees under Section 329(b). Fees must be reasonable considering the nature, extent, and value of services provided.
11 U.S.C. Section 329(b): "If [the] compensation exceeds the reasonable value of any such services, the court may cancel any such agreement, or order the return of any such payment, to the extent excessive."
Note: If you believe your attorney's fees were excessive, you can raise this issue with the court or the U.S. Trustee's office. The U.S. Trustee monitors attorney fees in bankruptcy cases as part of their oversight role.
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