Avoid the Pitfalls of Flat Rate or Zero-Money-Down Lawyers
Hi, I’m Marshall Cohen. I’ve been a practicing bankruptcy lawyer for 27 years. I’ve handled cases for individuals and for businesses. I’ve seen a lot in my time as a lawyer.
Lately, some people come into the office and they ask me, “Well Marshall, you seem like a very experienced attorney, but why should I hire you and not some lawyer down the street who says that he or she will do my case for $400 or $450? What’s the difference?”
Well, here it is! Some lawyers advertise a low fee to attract a lot of business. They might be there the day they take your money; they’ll shake your hand and give you a big smile but the truth is they’re way too busy after they take your money. Your case is handled by a legal assistant who may or may not be qualified to handle your case.
When you call up with a problem or an issue, an unqualified person might be the one answering the phone and one trying to give you what essentially is legal advice. This could have an adverse effect on your case. It could have an adverse effect on your finances, because an unqualified person is the one handling your case.
Some lawyers advertise a low fee because the truth is they’re unqualified, they’re inexperienced, and the only way they can attract business is by offering a low fee so they can get people through the door. You don’t want to be the guinea pig when it comes to your finances and you shouldn’t allow yourself to be, because the repercussions could haunt you for years.
Some lawyers offer a low fee advertising that they might put you in a Chapter 7 bankruptcy, but the truth is they might put all of their clients into a Chapter 13 bankruptcy. The Chapter 13 bankruptcies are much more expensive than a Chapter 7 bankruptcy.
This might be good business for the lawyer, but it’s like prescribing the same medication to every patient who comes through your door, regardless of the illness that they have. Or, like ordering a needed medical test that the patient doesn’t need.
Another way lawyers keep their fees low is by a practice called unbundling. Now, most people haven’t heard of this.
Unbundling is breaking apart the full legal services that a client needs and advertising a low price for just the initial type of service offered. But then, once you’re in the case and committed to the lawyer, charging a la carte additionally over and over again for every other little thing that you need to get your case completed. By the time you’re done paying for all the a la carte services, you could end up paying much more than if you went to an experienced, qualified attorney to begin with, who gave you a complete and honest price to begin your case.
There is a disturbing trend when it comes to unbundling services. Recently a company has formed that will allow clients to get their case filed for no money down – it seems like a miracle, but that miracle is very expensive, because the lawyer unbundles services and then once your case is filed has you sign a contract that is a financing contract. To pay for your case you then will give that contract to a company that will collect payments from you in the future. This can be an extremely expensive way to get your bankruptcy filed, and in my experience I find when people are under financial pressure, what they want is honesty, integrity; they want to know what they’re facing and they want to know what the price is going to be and how they’re going to pay for it upfront.
A new option that some lawyers might offer to induce you to come into their office is offering to file your bankruptcy for zero money down. When you’re stressed, this can sound like a great deal, but in reality this could cost you substantially. In order to file your case zero money down the lawyer has to unbundle his or her services. After your case is filed, they have you sign a financing agreement for their services.
The lawyer will then sell the financing agreement to a factoring company. In order for the lawyer to get paid and to take into consideration the money charged to him or her by the factoring company, the lawyer has to charge you a higher fee – otherwise the lawyer will make less money with each case that they file for zero money down.
In over 27 years of practicing bankruptcy law, I find that what people want in a bankruptcy attorney is honesty and integrity. Someone who will give them a true statement of where they are financially and how they can expect both their case and their finances to turn out when the case is completed.
This is the only way I know how to practice bankruptcy law. If you’re considering a bankruptcy and would like to talk with me further please give me a call – the number is 614-294-5040.