Your Rights (and Responsibilities) During Bankruptcy
March 22, 2019
Filing for Chapter 13 bankruptcy is a serious matter. That’s why California has established a formal document — the Rights and Responsibilities Agreement (RARA) — that outlines both your attorney’s rights and responsibilities and your rights and responsibilities. You can download a PDF of a document prepared by the United States Bankruptcy Court here.
The RARA is designed to protect you by establishing a flat fee agreement between the attorney and client. It also streamlines the process by allowing the attorney to be paid without doing a supplemental fee application with the court.
The RARA spells out the attorney’s responsibilities before a case is filed, which include:
Personally meet with the Debtor to review the Debtor’s assets, liabilities, income, and expenses.
Personally counsel the Debtor regarding the advisability of filing either a chapter 13 or a chapter 7 case, discuss both procedures with the Debtor, and answer the Debtor’s questions.
Personally review with the Debtor the completed petition, plan, statements, and schedules, as well as all amendments thereto, whether filed with the petition or later.
Personally explain to the Debtor that the attorney is being engaged to represent the Debtor on all matters arising in the case, as required by Local Bankruptcy Rule 3015-1(t).
Personally explain to the Debtor how and when the attorney’s fees and the trustee’s fees are determined and paid, and provide an executed copy of this document to the Debtor.
The RARA also describes the attorney’s responsibilities after the case is filed, which include:
Advise the Debtor of the requirement to attend the 341(a) meeting of creditors, and instruct the Debtor as to the date, time, and place of the meeting. In the case of a joint filing, inform the Debtor that both spouses must appear.
Inform the Debtor that the Debtor must be punctual for the 341(a) meeting of creditors. “Punctual” means that the attorney and the debtor(s) must be present in time for check-in. After checking in, if the attorney finds it necessary to request a second call, the attorney and the debtor(s) must be present for examination before the end of the calendar.
Attend the 341(a) meetings and any court hearing, either personally or through another attorney from the attorney’s
You, the person filing for bankruptcy, share responsibility during the bankruptcy process, agreeing to:
Discuss with the attorney the Debtor’s objectives in filing the case.
Provide accurate information, financial and otherwise, to the attorney in a timely manner.
Provide in a timely manner all documentation requested by the attorney, including but not limited to, true and correct copies of a variety of documents.
Just as important, after the case is filed, you agree to, among other things:
Make the required monthly payments on time.
Comply with the chapter 13 rules and procedures.
Keep the chapter 13 trustee and attorney informed of your current address and telephone number, and your employment status.
Sign a payroll deduction order, if one is required.
There are many other right and responsibilities that apply to both attorney and debtor, and a thorough reading of the RARA is a good place to get acquainted with the entire process.
If you review that RARA document, note that the items in bold are what the RARA fee covers. Likewise, there are other items not in bold. If your attorney provided services that were not listed in bold they can charge extra for those services. They must do a supplemental fee application in order for the extra fees to be approved by the court.
As you can see, filing Chapter 13 bankruptcy is not only a serious matter, it’s complicated. To help you through the process — or even determine if it’s a good option for you — give us a call. We’ll help you take a good, objective look at your options.