During bankruptcy, the court and the debtor form a plan to repay creditors as fully as possible. In return for regular payments, debtors are released from further liability for the debt. All remaining debts are discharged, and the case is concluded with no additional legal responsibility on the debtor’s part.
Can Lawyers’ Fees be Discharged?
In a personal bankruptcy, most debts, including attorneys’ fees, are dischargeable. The Bankruptcy Code’s Section 523 lists non-dischargeable fees as alimony, child support, fraudulent debt, student loans, DUI expenses, and court fees. Because the current lawyer’s fees are considered court costs, the Bankruptcy Attorney in Longview TX, will receive full payment. However, if the debtor hired an attorney before filing for bankruptcy, that lawyer may not be paid. Some lawyers file claims with the court, but most of these claims fail because they defeat the purpose of bankruptcy. In response, many attorneys charge a higher down payment and encourage clients to seek bankruptcy before services are provided.
Filing for Bankruptcy After Divorce
A family lawyer often encounters problems when a client files for bankruptcy right after a divorce. Many lawyers argue that their fees aren’t dischargeable because they help clients fulfill child support obligations. A 2005 ruling tightened requirements on the discharge of family support debts. Courts have ruled, however, that if fees weren’t part of an original child support ruling, they can be discharged in a subsequent bankruptcy.
Discharging Fines and Court Fees
Most fees imposed by courts are not dischargeable. Fines and other fees are intended to punish wrongdoing, and it is unfair to forgo punishment for those who cannot afford to pay the fee. The only exception is for non-punitive fees. For instance, damages in personal injury suits aren’t meant as a punishment, they’re meant to repay the victim. Therefore, they may be discharged in bankruptcy.
Does a Debtor Need a Bankruptcy Attorney?
Bankruptcy is a complex process, and laws vary according to bankruptcy type and filing location. A bankruptcy attorney knows how to file cases properly, and they can recommend the right bankruptcy chapter for the client. By visiting Williamlivelylawfirm.com and hiring a bankruptcy attorney in Longview TX, the client can ensure that paperwork is filed properly and that all eligible debt is discharged.