Can I get back fees for unfiled bankruptcy?


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Dear Bankruptcy Adviser,
I hired an attorney two years ago to file a Chapter 13 bankruptcy for me. I paid about $1,000 upfront. I never made any other payments, and my case was never filed. Can I get my money back? I feel like I paid for nothing.
— Carol

Dear Carol,
This is an excellent question. You are right; you should receive a refund if your attorney did nothing. If you paid him or her and no paperwork was completed or prepared, you are entitled to a refund — in some cases, the entire retainer fee.

First, confirm that the attorney did nothing on your file.

That is the key. Attorneys provide a service. They charge a fee for that service. That service takes time. If the attorney took his or her time to work on your case, something was done. Just because you did not move forward with your case does not mean the attorney did nothing.

Personally, I complete most or all of the petition when I am first hired. I spend a few hours preparing all documents, and I send those documents to my client. In most cases, the work completed exceeds the money I have been paid.

I do this because usually I am hired after an initial consultation of about 30 minutes. Right when I receive the first payment, I want to make sure that my new client is eligible for the relief he or she seeks. I will spend at least another hour and sometimes numerous hours preparing the petition and schedules, sometimes preparing a memorandum about the particular case and preparing a list of documents needed.

Then, I send my client the petition, schedules, memo and list of documents. In many cases, I have completed a large portion of the work required to file the case while being paid only a fraction of the retainer fee.

I say all this not to defend the particular attorney you hired. I really am defending the process and practice of law, in general. Attorneys provide a service that takes time to perform. Since the attorney can’t get the time back, the client is not entitled to get the money back. If the attorney took time to work on your case, he or she has earned some or all of the initial retainer.

You may have to accept that your decision to hire an attorney cost you money, even if you did not ultimately benefit from the services you sought.

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