If you’ve been researching bankruptcy costs, you may have come across the term:
“Bifurcated fee agreement”
It sounds complicated — but it simply refers to splitting attorney fees into two parts.
Let’s explain.
📌 Why Attorney Fees Are Usually Paid Before Filing (Chapter 7)
In Chapter 7 bankruptcy:
- Any unpaid pre-filing legal fees become dischargeable debt.
- That means if you owe your attorney money at the time of filing, that balance can be wiped out.
- Attorneys generally cannot continue representing you for free.
Because of this, most Chapter 7 attorneys require payment in full before filing.
But what if someone truly cannot afford that?
That’s where bifurcated agreements come in.
⚖️ What Is a Bifurcated Fee Agreement?
“Bifurcated” simply means split into two parts.
The legal services are divided into:
1️⃣ Pre-Filing Services
This may include:
- Consultation
- Basic analysis
- Preparation of initial documents
- Filing the petition
A limited fee is paid for this portion before filing.
2️⃣ Post-Filing Services
After the case is filed, a new agreement is signed covering:
- Attending the 341 meeting
- Communicating with the trustee
- Addressing routine issues
- Finalizing discharge
The post-filing services are paid over time, often in installments.
💳 How Are Post-Filing Fees Paid?
Post-filing fees may be paid:
- Through installment payments
- Through third-party financing
- Through structured payment programs
Importantly, these fees are considered new debt incurred after filing, so they are not dischargeable in the case.
🚩 Why Are Bifurcated Agreements Controversial?
Some courts carefully scrutinize them because:
- Fees can be higher overall.
- Clients must fully understand what is included.
- There must be clear, informed consent.
- Ethical rules must be followed strictly.
Not all jurisdictions allow them, and not all attorneys offer them.
💡 Are They a Good Idea?
It depends.
They can help clients who:
- Cannot afford to pay everything upfront.
- Need to file quickly to stop garnishment or foreclosure.
But clients should understand:
- Total cost may be higher.
- Payment obligations continue after filing.
- Terms must be reviewed carefully.
📌 The Bottom Line
A bifurcated fee agreement splits Chapter 7 attorney fees into:
- A pre-filing portion
- A post-filing portion
It can make bankruptcy more accessible — but it must be done carefully and ethically.
If you’re struggling with upfront costs, ask your attorney:
- Is bifurcation available in this district?
- What is the total cost?
- What services are included?
- What happens if payments stop?
Understanding the structure helps you make an informed decision.
