Livonia Michigan Bankruptcy - Michigan Bankruptcy Blog

Livonia Michigan Bankruptcy

Michigan Bankruptcy Blog

Detroit Bankruptcy Judge Rules Bankruptcy Law Firm’s Retainer Agreement is Invalid!

When I first started practicing bankruptcy law I sat down and read the Bankruptcy Code. One of the first things I realized is that in a Chapter 7 bankruptcy all attorneys’ fees must be paid prior to the actual filing of the bankruptcy. That being said I have always structured my attorney’s fees to be as affordable as possible and always work with my clients on an affordable payment plan.

A Detroit bankruptcy law firm took a different approach. You can just pay them $100.00 and they will file your case. You can pay all the remaining fees to them after your case is filed. Their approach flew in direct violation of the Bankruptcy Code, and Chief Bankruptcy Judge Phillip J. Shefferly issued a ruling that their fee agreement is invalid. Further, Judge Shefferly ruled that they are unable to collect any of their attorneys fees post filing. Congratulations to the clients of this bankruptcy law firm you no longer have to pay your attorney!

You see the Bankruptcy Code is quite clear. All of your creditors (including your bankruptcy attorney) are stayed by the filing of your Chapter 7 bankruptcy petition. This means your attorney is forever barred from taking any steps to collect any debt from you under § 362(a). Any act to collect this prepetition debt — even just asking you to pay it — violates the automatic stay that went into effect when you filed for relief under Chapter 7. Once you receive your discharge, any act to collect the debt is now prohibited by the discharge injunction of § 524(a).

If only the attorneys at this bankruptcy law firm would have read and understood the Bankruptcy Code this never would have happened. Why do I bring this up? Well at Phoenix Law my wife and I work on every case together. We are not the largest law firm in Detroit, but we offer outstanding service. We are caring and compassionate with our clients that are going through a difficult financial time. We do everything in our power to represent our client’s best interest within the confines of the current law. If this sounds like the type of attorney you want, by all means give us a call.

Peter Behrmann is a Livonia Bankruptcy Attorney.  From my Livonia, Michigan location, I represent clients throughout Metro Detroit and beyond, including Garden City, Wayne, Westland, Redford, Dearborn, Taylor, Ann Arbor, Belleville, Northville, Novi, Farmington, Farmington Hills, Plymouth, Canton, and the Counties of Wayne, Oakland, Livingston, and Washtenaw. My practice is limited to helping consumers like you file Chapter 7 and Chapter 13 Bankruptcy, and Foreclosure Prevention.

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