retainer requirement

[jimhurt]

What is the name of your state (only U.S. law)? South Dakota
Is it the law that the retainer must be paid in full before the lawyer can file chapter 7 for me or is it his requirement?

 

[PaulMass]

If you don't pay the full amount prior to the filing, the balance due becomes another debt that will be discharged.

While there is no law that says the balance must be paid prior to the filing, there is a law that says the balance cannot be paid after the filing.

To answer your question, it is the attorney's requirement, but only because that is the ONLY way he will get paid.

 

[Ohiogal]

What is the name of your state (only U.S. law)? South Dakota
Is it the law that the retainer must be paid in full before the lawyer can file chapter 7 for me or is it his requirement?

And why shouldn't the attorney have that requirement? Why should he work for free? Or close to it?

 

[Pinkie39]

If you don't pay the full amount prior to the filing, the balance due becomes another debt that will be discharged.

While there is no law that says the balance must be paid prior to the filing, there is a law that says the balance cannot be paid after the filing.

To answer your question, it is the attorney's requirement, but only because that is the ONLY way he will get paid.

I have to wonder about that law. My husband and I unfortunately had to file a Chapter 7 last year. The attorney we used took payment arrangements and filed our case before we paid his full fee. We just had to pay the balance prior to our 341 meeting or he would not represent us at the meeting. This was common practice for him. And yes, we did pay the balance in full and on time.

 

[despritfreya]

I have to wonder about that law. My husband and I unfortunately had to file a Chapter 7 last year. The attorney we used took payment arrangements and filed our case before we paid his full fee. We just had to pay the balance prior to our 341 meeting or he would not represent us at the meeting. This was common practice for him. And yes, we did pay the balance in full and on time.

There is nothing wrong with how you and your attny proceeded. The problem is that, if you flaked out and did not pay, your attny would have most likely been unable to sue you for collections but would have been ethically require to attend that 341 unless he obtained a court order allowing him to withdraw from the representation.

Most, if not all, districts do not allow attorneys to "unbundle" services through and including the 341 hearing. This means that the retainer agreement, signed before the case is filed, is a contract that covers everything up to and including attendance at the 341 and even beyond. The attny is required to fulfill his end of the bargain regardless of payment unless he is allowed to withdraw. On the other hand, if the client fails to pay the attny for a contract entered into before the case is filed, the attny will be unable to pursue collections and his/her only recourse is to file a Motion to Withdraw as Attorney of Record. The underlying obligation is a pre petition debt and is subject to the discharge. This puts the attny at an extreme disadvantage if he agrees to allow the client to pay after the case is filed.

You, as the client, simply made voluntary payments to the attny for a pre petition obligation and there is nothing wrong with that. There is a lot to be said of the honor system.

I can tell you that my Firm rarely agrees to file a Chapter 7 without full payment of the basic fee. If a potential client does not like that policy they will go to someone else.

Edt to add a personal comment:

As an attny I believe I have a duty to advise my client that the obligation may be subject to discharge if not paid before filing. I also have a duty to let the client know that voluntary payments after filing are fine but that if payment is not made, I cannot sue. Not so advising the client is, IMO, a breach of my ethical duty to properly advise and zealously represent the client.

For an attny that does not require full payment up front, this creates a huge conflict of interest and, as a result, (again, IMO) is not a good business practice for any attny.

So, did your attny tell you whether or not his district allows unbundling of services and whether or not the contract is subject to the discharge? I personally have a problem with him if he did not fully advise you on this matter.

Des.