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Michigan Bankruptcy- In Chapter 13 Can You Choose Between Paying a Set Fee or On An Hourly Basis?

Michigan Bankruptcy Fee or Hourly Basis Fee.

Each 2016(b) statement provides for compensation to be either a stated flat fee; or payment of a stated retainer amount against which the attorney would bill at a specific hourly rate, with debtor agreeing to pay all Court approved fees exceeding the retainer. 

During the consideration of a Ch. 13 fee application the argument was offered…that it was local custom and practice regardless of the statement, to give a fee Applicant the option to accept the stated flat fee, or file a fee application on an hourly rate basis, with there being no cap amount (on fees charged)  established.  Contrarily Judge Shapero ruled Applicant is incorrect in this view when the option isn’t presented first in the 2016(b), In re Cloud (Bankr. E.D. Mich. 2007).

For the allowance, an Applicant needs to have set forth an hourly rate, and clearly and simply state in the 2016(b) an option to charge on a time spent basis; also define there that the attorney could ask for fees over and above the flat rate minimum.