$499 Bankruptcy?  Don’t be a victim of “bait and switch” advertising

If you search on the Internet for “bankruptcy,” you will see ads offering bankruptcy for very low prices of , $499, $599 etc. Can you really hire a licensed bankruptcy attorney to complete the bankruptcy  process  and fully represent you for such a low price?

Ask some questions.  Ask what the fee covers.  (i) Does it include more than just preparing your bankruptcy petition?  (ii) Does the attorney prepare the bankruptcy and meet with you or will you meet with a secretary?  (iii) Will the attorney talk to your creditors to let them know you are filing bankruptcy?  (iv) Will the attorney be there with you when you go to the meeting of creditors?  (v) Will the attorney negotiate a reaffirmation agreement and be there to help you.?  (vi) Will the attorney be available to answer your questions?. These are just a few of the issues that can arise in a “simple” bankruptcy case.

Part of the bankruptcy paperwork submitted to the court includes an attorney fee disclosure. The bankruptcy rules require an attorney to disclose the fee he or she charged to the debtor.  Ask the advertiser to show you 5 Chapter 7 bankruptcy attorney fee disclosures from prior cases filed in the last 3 months showing the debtor paid only $499 or $599 or whatever low amount the firm advertises.  See how the firm reacts to your request. Bankruptcy petitions are public record, so you do not have to accept any excuses that the firm cannot disclose “confidential” fee disclosures. The word “disclosure” means the firm has disclosed or publicized its fee. To protect the client’s confidentiality, the firm can cross out the social security number of the debtor and show you the fee disclosure.

Do not give the firm an opportunity to weasel out of its advertised price. Tell the firm to show you five fee disclosures within the past 3 months at the advertised price, or you will walk out the door and never be back and never recommend that firm. Assuming the firm actually has a case it filed for $399 or $499; verify the case number and then ask to see the corresponding Form B1 (Voluntary Petition) to see if an attorney actually signed the petition. Often times, with these low prices, the client is NOT hiring an attorney. Instead, some attorney is merely managing a non-attorney paralegal or secretary to fill out your paperwork. This type of non-attorney can help you fill out forms but cannot provide ANY LEGAL analysis. You may have to file your petition and represent yourself in the meeting of creditors  with the bankruptcy trustee.

It would be surprising if the firm could show you more than one fee disclosure at the advertised fee. Bankruptcy petitions are filed electronically, and bankruptcy attorneys have access to the case management system (PACER). In fact, you can request access too. So everyone can, in principle, view all the documents filed in any bankruptcy case and see what other attorneys really charge for bankruptcy.

These low advertised prices are often bait and switch marketing techniques.  Similar, to stores that lure shoppers in with an advertised price, e.g., for a 42″ LED television for $599, but when you read the fine print, either the TV is refurbished, or the store only has a tiny number of TV’s at that price. How do you feel when that happens? Attorney are held to a higher standard.

The same idea applies to discount bankruptcy firms. In theory, there may be an extremely simple case that an attorney could handle for $599 (which I do) . But more often than not, you will find these firms end up charging you a much higher fee because your case is more complicated than the one advertised at the super low bait price. These firms are hoping that after you take the time to fill out a 20-page questionnaire, you won’t have the time or energy to start the process over with another attorney.

In contrast, I offer Chapter 7 bankruptcies in  Colorado for a flat and fixed fee.

We are a Federally Designated Debt Relief Agency and Bankruptcy Lawyers who help people file for bankruptcy relief under the Bankruptcy Code. We do not retain clients on the strength of advertising material alone but only after following our own engagement procedures based on in-person interviews, conflict checks, and retainer agreements. The information contained on this site is intended to educate members of the public generally and is not intended to provide solutions to individual problems. Nor does the use or reliance of information contained on this web site constitute the establishment of a lawyer-client relationship. Readers are cautioned not to attempt to solve individual problems on the basis of information contained herein and are strongly advised to seek competent legal counsel before relying on information on this site. Serving the cities of Arvada, Aurora, Boulder, Brighton, Broomfield, Castle Rock, Centennial, Cherry Hills, Conifer, Commerce City, Denver, Denver Tech, Erie, Evergreen, Greenwood Village, Golden, Highlands Ranch, Lafayette, Lakewood, Littleton, Lodo, Longmont, Louisville, Lone Tree, Morrison, Northglenn, Parker, Thornton, Ft. Collins, Nederland, Rollinsville, and Westminster.