Nebraska bankruptcy attorney Patrick Patino and had a great conversation about the hot topic of bifurcated chapter 7 fees in Nebraska.
In a traditional chapter 7 case all fees must be paid before a case is filed. Why? Because unpaid attorney fees are wiped out once a case is filed so attorneys demand that all fees be paid BEFORE a case is filed.
But under the controversial bifurcation fee agreement the attorney only prepares some of the work before the case is field. After the case is filed the client signs a new contract to complete the case. Since most of the work is prepared after the case is filed the attorneys are, in theory, allowed to accept monthly payments.
Is this possible? Can attorneys charge a small fee down to file a skeletal chapter 7 case and then accept payments after the case is filed for the remaining work?
As our discussion reveals, the promise of affordable chapter 7 fees under the bifurcation fee arrangement may be illusory.