Legal Question in Bankruptcy in Virginia

Re: Fees

You are probablly being advised to file Chapter 13, which involves a repayment plan to your creditors over 36-60 months. This allows you to keep property that you would otherwise lose, discharge certain types of debts that you would otherwise not be able to discharge in a chapter 7, and cure defaults on mortgages and other secured claims. Your attorney is not receiving that money -- your creditors are, through the trustee to whom you will pay it. Your lawyer may also be willing as a courtesy to you to take part or all of his fee through that plan (his fee is probably about $1250). Your friend filed Chapter 7, which is simpler and discharges most but not all kinds of debt without any repayment obligation ($500 is still very low for a Chap. 7, and you generally get what you pay for in terms of quality of representation). Ask your lawyer why you are filing Chapter 13 instead of Chapter 7, and you will probably get a good answer.