Bankruptcy Law Blog

Tuesday, January 17, 2017

Are Attorney’s Fees Dischargeable in an Alabama Bankruptcy?

Is bankruptcy the right choice for me if I owe significant attorney’s fees?

Many Americans today are burdened by debt.  An estimated eight out of 10 Americans are in debt, some seriously, with debts ranging from mortgages, unpaid credit card balances, student loans, car loans, and attorney’s fees, among other expenses.  Attorneys, particularly family law and divorce attorneys, can charge hefty fees.  Your legal fee debt could mount rapidly during a divorce or other legal matter.  You may find yourself wondering whether attorney’s fees are dischargeable in bankruptcy.  Our Mobile, Alabama bankruptcy attorneys explore the discharge of attorney’s fees in bankruptcy below.

Chapter 7 Bankruptcy and Attorney’s Fees

Chapter 7 bankruptcy is designed to offer individuals a fresh start by releasing them of their dischargeable debts.  The Bankruptcy Code provides a list of debts that are not dischargeable. These include:

  • Child support
  • Alimony
  • Court fees and court costs
  • Luxury items purchased right before the divorce
  • Government education loans
  • Debt incurred through fraud
  • Secured debts, like mortgages and car loans

Attorney’s fees are notably not among these debts.  Often, debtors seek to discharge debts stemming from a divorce.  Filing for Chapter 7 bankruptcy after divorce can provide you with a clean slate.  However, debtors will, at times, encounter a protest by the family law attorney who claims the fees were incurred as a part of child support or alimony arrangement.  This argument is generally surmountable so long as the attorney’s fees were not ordered as part of an alimony or child support judgment.  Your bankruptcy attorney can help you to defend your right to discharge divorce attorney legal fees in a Chapter 7 bankruptcy.

While most attorney’s fees are dischargeable in a Chapter 7 bankruptcy, court fees and fines are not.  This means that if you have significant fines stemming from a criminal law or other legal matter, you will still need to pay the fines back after your bankruptcy.  Your bankruptcy lawyer will carefully evaluate your debt on a case by case basis to provide you with an individualized assessment of your legal rights.  

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Padgett and Robertson assist clients with Bankruptcy, Personal Bankruptcy, Consumer Bankruptcy, Chapter 7 Bankruptcy, Chapter 13 Bankruptcy and The New Bankruptcy Law in Mobile, Alabama and throughout southern Alabama. Alabama State Bar Association Regulations require the following: "No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers." 11 U.S.C. 528 of the U.S. Bankruptcy Code requires the following: "We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.”

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