Over the years, far too many clients have come to me to fix avoidable problems. They have tried to deal with financial issues on their own. Or worse yet, they relied on counsel only to be left in a worse position. There are many bankruptcy lawyers who market themselves as providers of low-cost bankruptcy services. Some in our industry, refer to these providers as bankruptcy mills. Be that as it may and based upon my experience, low-cost does not always mean more affordable.

The following is a real example to illustrate my point of low-cost bankruptcy. Of course, this story has been sanitized to protect the innocent. The name of our main character is Miss Client.

Chapter 1

Over two years ago, Miss Client contacted our office. She set up an appointment to receive her free 30 minute consultation.  However, on the day of the appointment, Miss Client did not come. We put her on our “no-show” list.

Chapter 2

We do our best to keep in touch with people on our no-show list through our outreach program.  Through this program, we reconnected with Miss Client and she scheduled an appointment. At this appointment, we found out that she had hired what she thought was a low-cost bankruptcy attorney to assist her with a Chapter 13 case on a recommendation from a friend.

Chapter 3

Miss Client fully paid her lawyer who filed a Chapter 13 bankruptcy on her behalf. The Chapter 13 Trustee determined that she must sell her house. When she was unable to do so, Miss Client entered into a consent order with her condo association. The condo association was her primary creditor. After some back and forth, the judge reduced the amount owed to the condo association. With a loan from her family, and on the advice of her bankruptcy attorney, Miss Client allowed her Chapter 13 to be dismissed and directly paid the reduced amount back the condo association in a lump sum.

Chapter 4

One year later, the condo association sued Miss Client. At this point, she could not afford to hire another attorney. Therefore, she represented herself. Eventually, she thought the matter reached a final resolution. However, she had in fact missed a deadline and the condo association’s attorney made a request for entry of default judgment. Not understanding what this meant, she failed to respond. The condo association now has an effective and no longer appealable judgment in hand, a lien on her home, a levy on her accounts, and a garnishment on her wages.

Chapter 5

Miss Client went back to bankruptcy attorney for assistance. He told her that he could not help. Further, he suggested that she file an ethics complaint against the condo association’s attorney for pursuing her for collection of a debt that he alleged the condo association had known to be paid in full.

Chapter 6

The condo association was not paid in full. They were paid the reduced amount pursuant to the bankruptcy order. But the bankruptcy case was dismissed with no conclusion or settlement with the condo association. Therefore, the bankruptcy order with the reduced amount has no practical meaning. When a Chapter 13 plan is confirmed but not completed, the debtor does not receive a discharge. Since the reduced payment was made outside of the plan and the case was dismissed, Miss Client was on the hook for the full balance of the claim and the lien on her condo was not avoided, extinguished or satisfied


Miss Client has finally found a buyer of her home. The proceeds from the home sale will be used to repay the condo association and her family for the original loan as well as others through the years. She is no able to file a Chapter 7 and a Chapter 13 would not do any good at this point.

Unfortunately, I hear versions of this story far too many times.  I am not saying all attorneys who promote low-cost bankruptcies are bad or unethical. However, like anything else in life, most of the time, you get what you pay for in terms of attention, service, and guidance. Do your homework. This story shows the complexities of financial issues. As such, if handled poorly, you may spend much more in the long run and, even worse, end up without the relief you bargained for. So, low-cost bankruptcy may not be so low cost after all.

As always, please call me if you have questions about this blog.