How Much Does A Bankruptcy Cost? For some, a lot.

It is important that you hire an honest and ethical law firm. A recent case out of the United States Bankruptcy Court for the Western District of Missouri highlighted the dangers of hiring some firms. The Castle Law Firm, under the management of Jason C. Amerine, has been fined and referred to the Office of Chief Disciplinary Counsel of the State of Missouri. In re Kolle, United States Bankruptcy Court, W.D. Missouri. December 10, 2021 Slip Copy 2021 WL 5872265

The bankruptcy firm was using a factor finance company for some bankruptcies. Clients who paid in cash were charged one amount and clients who could not pay were charged twice as much. The court found that they had improperly certified both that they had complied with the fee agreement regulation of the Western District of Missouri Bankruptcy Court and that they improperly certified that they were paid nothing to file the case but were paid all of their fees after the case was filed. Attorneys who are owed fees prior to filing are creditors just like the rest of a consumer’s creditors.

Importantly, however, the Court also found that the fee arrangements violated various conflict of interest provisions and provisions relating to maintaining client funds in trust until the work had been performed.

Importantly, clients who were unable to pay their fees before they filed were convinced to sign agreements where they would pay nearly twice as much in only nine months after their bankruptcy filing.

More sinister is the fact that Castle Law Firm knew that this creditor that they convinced their clients to allow to loan them money would have the protection of bankruptcy law itself to ensure that they extracted their fees and any other contractual expenses over the years. Once you’ve been granted a Chapter 7 discharge, you cannot get another one for eight years. This meant that the work that Castle Law Firm and the factoring firm together resulted in clients emerging from bankruptcy with a new debt they could not reasonably hope to obtain bankruptcy relief for.

At BKTP Bankruptcy Law, if you are unable to pay a lawyer to represent you, you will be referred to services that verify your need and then find attorneys to represent you for free. Our attorneys volunteer with these programs. If you have a particular financial need, please feel free to discuss it with us and we will treat you honestly and with respect.