The courts are split over a provision of the Bankruptcy Code,' in which the majority courts hold that upon the filing of a Chapter 7 bankruptcy, 2 unpaid attorney fees, for pre-petition work in connection with preparing and filing bankruptcy, are discharged. In contrast, the minority view holds that attorney fees in connection with preparing and filing a bankruptcy are not dischargeable whether prepaid or not, as long as they are not excessive.4 The problem with the majority view is that indigent debtors may be deprived of access to legal counsel unless they can pay all or most of their attorney fees in advance. 5 In addition, any attorney that represents debtors who cannot afford to pay the entire fee in advance, runs the risk of having a conflict of interest with the debtor.6 The minority view holds that Congress simply assumed that attorney fees in contemplation of bankruptcy would not be dischargeable unless they were excessive, 7 and these courts find support from provisions in the Code and Rules which clearly contemplate and provide for the disclosure and court supervision of such fees. 8 This comment will compare and contrast the majority and minority opinions, and then argue that the minority approach is preferable from both a public policy perspective and in keeping with Congress' intent in enacting the Bankruptcy Code. By adopting the majority view, courts may deprive indigent citizens of the only practical means of paying for legal assistance in the bankruptcy context.
James L. Neher,
Rethinking The Discharge Of Pre-Petition Attorney Fees In Chapter 7 Bankruptcy: A Debtor Oriented Perspective,
U.D.C. L. Rev.
Available at: https://digitalcommons.law.udc.edu/udclr/vol6/iss1/10