Chicago Bankruptcy Judges Amend Local Forms Again

New Court Approved Agreement Per Bankruptcy Judges

The Chicago Bankruptcy Judges have amended the local forms again. ¬†Beginning April 20, 2015, chapter 13 bankruptcy attorneys working on a flat fee arrangement are required to use the updated court approved retention agreement. This agreement spells out exactly what the attorney’s duties are, what the debtor’s duties are, as well as numerous explanations regarding what can happen in a chapter 13 bankruptcy case. The main difference in the new agreement is that it spells out the fact that the agreement is not a judgment, it talks about what happens upon conversion to chapter 7 and it lists in greater detail the actual amount including expenses that the attorney is seeking as part of the representation.

Fee Application & Fee Order

In addition to the model retention agreement update, the court is also mandating use of the new fee application and fee order. The fee application brings into play an item that was present in the applications of years past. The chapter 13 attorney will have to disclose what payment if any it received from the debtor within one year of filing the current case. This was something that was available in the past where the judges were seeking to know how much the debtor’s counsel was paid prior to the bankruptcy. Prior to this amendment, the court was no longer concerned with that fact. Now, all of a sudden, that fact is somehow back in play and required.

Frustration In Compliance

The new fee order is very similar to the prior order and it must be used in all cases filed after April 20, 2015. If you fail to use the updated court-approved model retention agreement, new fee application and new fee order, you as the debtor’s counsel are likely going to have your fees denied. So compliance is imperative. The new forms will lead to frustration on the part of debtors counsel. For example, all of the people that are currently in the pipeline to be filed, will have to be sent the new retention agreement which must be executed. In some circumstances, it may be difficult for the debtor to comply and execute the new agreement. It will leave some debtors thinking that the attorney simply is burdening them with additional documentation that they already have signed. In any event, the volume filers of chapter 13 bankruptcy cases in Chicago and the district in its entirety will have the most difficulty in making sure that all of the cases being filed and then subsequently brought for hearing on the application of fees are utilizing the correct forms.

It would be interesting to note whether or not the bankruptcy liaison committee was involved with the judges in talking about the new amendments. In any event, compliance is a must. So proceed with caution and make sure that you have all of your documentation so that you can get paid for your services in all of your chapter 13 bankruptcy cases filed in the Northern District of Illinois.

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