Is A Money Judgment For Legal Fees In Child Support Hearing Dischargeable In Bankruptcy?
In a Nutshell
If you owe attorney fees when y'all go to file your defalcation instance, most will exist treated equally unsecured debt and discharged as part of your defalcation case. In that location are some exceptions to this, especially for attorney fees related to family unit court matters. Keep reading to learn more about how attorney fees are treated in bankruptcy.
Filing for bankruptcy has many upsides. Y'all get the benefit of an automatic stay to stop collections, including serious measures like wage garnishment or foreclosure. And one time your case is processed and y'all receive a discharge, many of your debts are wiped away, and y'all tin start with a clean slate. Well-nigh filers even see their credit scores amend. But to become to that indicate, you may need legal help from an attorney, and that means paying attorney fees. Or yous may be dealing with former attorney fees that yous can't afford to pay as you enter your defalcation case.
When you file bankruptcy, you'll be required to listing all your debts. This includes attorney fees. They can, and should, be included in any defalcation filing. The larger question is, "Can chaser fees tin be discharged in a bankruptcy proceeding?" The respond to that question is generally "aye." Attorney fees are commonly treated the same as whatsoever other unsecured debt. That means that in almost cases you lot can walk away from that debt at the stop of your bankruptcy. In this commodity, we'll explain why this is the case and a few exceptions you lot should exist aware of.
Most Attorney Fees Tin Be Discharged
For the nearly function, any debt you owe to an attorney is treated just similar your other unsecured debt in defalcation, such equally credit cards or your medical bills. Consumers frequently file Chapter 7 and Affiliate thirteen cases. Each blazon of bankruptcy treats unsecured debt a picayune differently.
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In Chapter 7 bankruptcy you can walk abroad from prior attorney fees later on receiving your discharge.
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If you file Affiliate thirteen defalcation, y'all tin eliminate attorney fees you owe (other than to your current bankruptcy attorney) also. They'll exist treated similar any unsecured debt in your Chapter 13 payment plan. This means you'll pay a portion of the fees each calendar month for the duration of your Chapter xiii programme, which is unremarkably three-5 years. After your Chapter 13 repayment plan is over, any remaining unsecured debt will be discharged.
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Are All Attorney Fees Treated the Same?
Almost chaser fees are dischargeable in bankruptcy, but at that place are a few exceptions and other of import things to know.
Chaser Fees for a Bankruptcy Attorney
Ironically, information technology unremarkably costs money to file defalcation and go debt relief. In addition to a court filing fee, you may too have bankruptcy attorney fees if you want legal communication to file your defalcation petition. Legal fees for a bankruptcy lawyer aren't treated any differently than attorney fees for other legal services in Chapter 7. This is why most Chapter vii bankruptcy attorneys crave their clients to pay them in full before filing their Chapter 7. Otherwise, they chance having their fees discharged forth with the residue of the client'south unsecured debts.
This works differently in Affiliate 13 considering a office of your attorney fees is paid through your Chapter 13 plan. This ways you don't demand to come up with all the money upfront. Instead, you'll pay your defalcation attorney merely a portion of the fees and costs for your case. The rest of the attorney fees volition be paid in total past the Chapter 13 trustee.
This is an important aspect of Chapter xiii bankruptcy because the attorney fees are usually higher than for Affiliate 7 cases. Your bankruptcy costs, including attorney fees, will vary by the complication of your case too every bit which type of bankruptcy you choose to file.
Chaser Fees From a Divorce Proceeding
Attorney fees from a divorce proceeding tin can exist a little trickier to bargain with. Some divorce attorney fees are dischargeable only others aren't. It depends on what exactly the divorce attorney was working on.
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Attorney fees for many aspects of divorce, like a property settlement, are treated as unsecured debt. This means they can be discharged under bankruptcy law.
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If y'all owe chaser fees to a old spouse or partner for a proceeding dealing with alimony or child support, these chaser fees may not exist eliminated if they're considered part of the support awarded. That'due south because the Bankruptcy Lawmaking states that alimony and child support are non-dischargeable in defalcation.
Additionally, if attorney fees were incurred in the defense of something that is already not-dischargeable, such as a breach of fiduciary duty, an intentional tort, or a criminal activeness, those fees may likewise exist considered to be non-dischargeable.
Chaser Fees Secured By a Lien
Finally, attorney fees might survive a defalcation filing if they are a secured debt. If you sign an agreement with an attorney that allows them to place a lien on your property, you've essentially turned an unsecured debt into a secured debt. Y'all can walk away from an unsecured debt afterwards a Chapter 7 bankruptcy case is complete, but walking away from a secured debt isn't as simple.
If you discover yourself in this scenario yous should consult with a bankruptcy attorney nigh your best side by side steps. There are some legal options to remove the security involvement, simply they can get technical, and then yous may want legal help. Keep in heed, many defalcation attorneys offer gratuitous consultations, and you tin use this fourth dimension to get a sense of your options.
Don't Forget To List All Your Debts
When filing bankruptcy, be sure to list all debts in your defalcation forms as required past the Bankruptcy Code. If yous owe outstanding attorney fees, that'south a debt you lot'll desire to listing.
Call up that when yous become to file your bankruptcy petition, y'all sign the forms under penalty of perjury, certifying that y'all've included all your financial information. This includes disclosing whatsoever and all debts you've incurred up until your filing engagement. If y'all're currently pursuing any other legal action, you need to disclose it, especially if you're hoping to eliminate attorney fees related to it.
Let's Summarize…
Most attorney fees incurred before filing defalcation will be treated every bit unsecured debt and eliminated in whatever consumer bankruptcy case. Unless one of the exceptions discussed above applies to yous, in one case you receive your defalcation discharge, you lot'll no longer have to pay outstanding chaser fees. They're treated but similar other unsecured debts, including credit card debt and medical bills.
Your prior (or current) attorney will receive notice of your bankruptcy case once it's filed. They can file an objection to having their debts discharged, but unless they fit into one of the discussed exceptions, the bankruptcy court will deny their asking and find the attorney fees to be dischargeable.
Source: https://upsolve.org/learn/discharge-attorney-fees/
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