Personal Bankruptcy Is Zero Down Legit?

[Vincent]

Jurisdiction

Illinois

Hello,

I have seen a lot of advertisements in IL for Chapter 7 bankruptcy zero down to file.

I was told by a couple that I called that they would file for zero down to file, and then set up a payment plan for the fees spread out for X amount of months.

I wanted to know if this was a sales gimmick or something legal?

Thanks!

 

[adjusterjack]

Yes, it's obviously a sales gimmick. Yes, it's legal.

I ran through several websites to finally figure out that it's a thinly disguised bait and switch gimmick.

One website points out:

Chapter 7 bankruptcy does not require you to pay back any dischargeable debt. In fact, if you still owe your bankruptcy attorney who works for you any fees you owe your attorney for filing your bankruptcy cannot be collected after the bankruptcy is filed. That bill would get discharged just like the rest of your debts.

So how does the attorney make sure he gets his money.

Well, you have to "qualify" for the $0 down and the only way you qualify is to file Chapter 13 instead of Chapter 7. Chapter 13 allows you to pay off all or part of your debts including the attorneys bill during the payoff period.

If Chapter 7 is the best way for you to go, then you pay your filing and attorney fee up front.

In other words, the attorneys that offer Chapter 7 filing for $0 down are shysters who should be avoided.

 

[zddoodah]

I wanted to know if this was a sales gimmick or something legal?

It might be both.

When you file for a Ch. 7 bankruptcy, you need to pay several things: (1) your attorney's fees; (2) the court's filing fee; and (3) financial responsibility classes. Most attorneys require payment of a flat fee up front, but an attorney can allow you to make payments, including not requiring a "down payment." I have a hard time believing any attorney is going to front the court's filing fee (currently $335, which is actually an amalgamation of several smaller fees) or pay for you to take the financial responsibility classes.

You can probably assume that an attorney offering discounted services or terms like this will not give you any more than the minimum amount of attention required (and, in fact, you may end up communicating only with a paralegal or legal assistant). Just be sure that the payment terms are clearly set forth in the written retainer agreement and that you understand the terms before signing anything.

 

[despritfreya]

You might want to read this regarding the unbundling of services, fee arrangements and ethical issues:

Key Ethics Issues for Bankruptcy Attorneys: A Judge's Perspective

Hopefully the link works. If not try to copy and paste. If you get to the seminar materials, scroll down to page 19. Read 19 through 24 and specifically look at page 22 item 3.

Des.

 

[adjusterjack]

The link works. That's a great article. I especially enjoyed the downfall of Lawyer X.

 

[Vincent]

Thanks for the replys.

I went with Debtstoppers.

They did front the money for the Chapter 7.

They took the amount for the filling fee and their fee and broke it into 6 month payments.

I was able to get my case ID before I left, and my 341 meeting with the creditros is set for early next month.

Once I get a discharge, I will let you know.

If not I will be scammed.

So far it looks legit.

Thanks

 

[army judge]

Thanks for the replys.

I went with Debtstoppers.

They did front the money for the Chapter 7.

They took the amount for the filling fee and their fee and broke it into 6 month payments.

I was able to get my case ID before I left, and my 341 meeting with the creditros is set for early next month.

Once I get a discharge, I will let you know.

If not I will be scammed.

So far it looks legit.

Thanks

Debtstoppers is legit.
You're on the road to recovery.