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Vanderbilt Law Review

Kerry H. Ducey

First Page

1665

Abstract

The scenario is typical. An individual sits amid a pile of overdue bills. He calculates and recalculates only to verify what he has already suspected-his debt far exceeds his monthly income. Meanwhile, creditors and collection agencies demand payment while threatening repossession and other legal action. With no ready source of additional income, the debtor ultimately decides to file for bankruptcy. He consults an attorney, and the two agree to file a consumer no-asset Chapter 7 bankruptcy petition.' The lawyer then promises to use her best efforts to secure relief for the debtor. All she needs is a retainer. A retainer? The debtor has no money, which is why he sought the counsel of a bankruptcy attorney in the first place. The attorney, however, needs to be paid up front for the services she renders prior to filing the bankruptcy petition. Otherwise the court will likely discharge those fees in the bankruptcy proceedings, and the attorney will not get paid for her prepetition work. Dejected, the debtor leaves without an agreement or an attorney, wishing he were wealthy enough to file for bankruptcy. Legal counsel is indispensable if a debtor is to effectively file for bankruptcy. The bankruptcy laws are complex, and legal counsel is often crucial in helping the debtor make an informed decision based on his unique circumstances and the available alternatives. Unfortunately, it is unlikely that a no-asset Chapter 7 bankruptcy debtor can afford to pay a bankruptcy attorney up front. This leaves bankruptcy practitioners in a predicament; without a retainer, prudent counsel will not agree to pay the requisite filing fees or to perform other necessary pre-petition services because the debtor's obligations to pay for pre-petition legal services are likely to be discharged in the bankruptcy proceeding. This situation "limit[s] indigent debtors' access to bankruptcy relief and, perhaps, Legal counsel is indispensable if a debtor is to effectively file for bankruptcy. The bankruptcy laws are complex, and legal counsel is often crucial in helping the debtor make an informed decision based on his unique circumstances and the available alternatives. Unfortunately, it is unlikely that a no-asset Chapter 7 bankruptcy debtor can afford to pay a bankruptcy attorney up front. This leaves bankruptcy practitioners in a predicament; without a retainer, prudent counsel will not agree to pay the requisite filing fees or to perform other necessary pre-petition services because the debtor's obligations to pay for pre-petition legal services are likely to be discharged in the bankruptcy proceeding. This situation "limit[s] indigent debtors' access to bankruptcy relief and, perhaps, increase[s] the number of pro se bankruptcy debtors," leaving ignorant debtors alone to navigate the complex waters of bankruptcy law.

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