Local Rule 2016-1: COMPENSATION OF PROFESSIONALS

Rule 2016-1 COMPENSATION OF PROFESSIONALS

(a) COMPENSATION OF ATTORNEY FOR DEBTOR IN CHAPTER 13 CASES.

(1) AMOUNT OF STANDARD BASE FEE. The standard base fee in a chapter 13 case is as provided in the statement of approved compensation published annually by the clerk and included in the Administrative Guide to Practice and Procedure. Though the standard base fee will typically be approved by the court without hearing, the trustee may recommend, in appropriate cases, that a lower fee be allowed. In recommending a standard base fee in converted cases, the trustee shall take into consideration the compensation already received.

(2) SERVICES INCLUDED IN THE BASE FEE. The standard base fee includes the basic services reasonably necessary to represent properly the debtor before the bankruptcy court. Those basic services should include, but not be limited to, the following: (A) interview with the debtor; (B) analysis and recommendation of appropriate chapter of Title 11; (C) reasonable inquiry into the debtor's assets, including efforts to confirm or verify ownership through search of a tax office, register of deeds office, other public records search, or document review; (D) obtaining credit report, pay advices (if no wages or self-employed during the applicable period, an appropriate affidavit), and tax returns; (E) preparation of all documents required under § 521 of the Bankruptcy Code, including, but not limited to, the schedules, Statement of Financial Affairs for Individuals Filing for Bankruptcy, Forms 122C-1 and 122C-2 (if applicable), and chapter 13 plan; (F) representation at the creditors' meeting under § 341 of the Bankruptcy Code, or filing a motion to use interrogatories and the subsequent filing of interrogatories; (G) preparation of any amendments to schedules or statement of financial affairs or plan modifications; (H) attendance at plan confirmation hearings; (I) preparation of motion to extend or impose automatic stay for repeat filers, if appropriate; (J) motion to substitute collateral; (K) application to incur debt; (L) handling of insurance inquiries; (M) defense of motion to dismiss or motion to set aside dismissal; (N) objection to claim; (O) notice to abandon property; (P) filing of proof of claim; (Q) motion to deem mortgage current; (R) motion to surrender; and (S) preparation of motions to dismiss.

(3) APPLYING FOR A HIGHER BASE FEE. Applications for approval of a base fee higher than the standard base fee must be filed by the debtor's attorney within 60 days after the conclusion of the creditors' meeting under § 341 of the Bankruptcy Code.

(4) NON-BASE FEE SERVICES DEFINED. The following services are not covered by the standard base fee, and additional compensation for these services may be awarded by the court: (A) motion for authority to sell real property; (B) motion for turnover; (C) prosecution or defense of adversary proceedings; (D) motion or adversary proceeding to value collateral and avoid mortgage; (E) motion to avoid lien with compensation limited to one motion to avoid lien per case; (F) motion for hardship discharge; (G) any other service that, in the discretion of the court, reasonably warrants additional compensation.

(5) APPROVAL OF NON-BASE FEES. Applications for fees for any non-base fee services provided to a chapter 13 debtor must be approved by the court. Notice of each application for fees and expenses in the amount of $1,000 or below must be sent to each debtor and the trustee. Notice of each application for fees and expenses in excess of $1,000 and above must be given to all parties in interest.

(6) PRESUMPTIVE NON-BASE FEES/APPROVAL/ NOTICE. The list of presumptively reasonable non-base fee services is contained in the statement of approved compensation published by the clerk and included in the Administrative Guide to Practice and Procedure. Applications for the presumptive non-base fee must be filed with a notice verifying completion of the services for which compensation is sought and a certificate of service evidencing service of the notice on each debtor and the trustee. After notice pursuant to subsection (5) above, the application for presumptive non-base fees will be deemed approved by the court but is subject to modification by the court upon a timely objection.

(7) TIME AND EXPENSE ALTERNATIVE. Alternatively, the debtor's attorney may apply to the court for approval of fees on a "time and expense" basis pursuant to Rule 2016 of the Federal Rules of Bankruptcy Procedure and 11 U.S.C. § 330.

(8) DISCLOSURE OF FEE PROCEDURES. Every attorney for a chapter 13 debtor must disclose to the debtor the procedures applicable in this district to awards of attorneys' fees in chapter 13 cases.

(9) INTERIM APPROVAL OF PARTIAL BASE FEE. An attorney fee incurred for services provided to the debtor in connection with the bankruptcy filing prior to the petition date is authorized and shall be considered part of the base fee. Any amount in excess of the base fee collected by the attorney prior to filing the chapter 13 petition must be held in the attorney's client trust account pending further order of the court or approval of the fees in accordance with this rule.

(10) PAYMENT OF ATTORNEY FEES/MODIFICATION OF PLAN. The standard base fee, less any partial base fee paid prior to filing the chapter 13 petition, will be treated and paid as administrative expenses of the chapter 13 case. These fees shall be paid by the trustee at the rate set in the Administrative Guide to Practice and Procedure unless the court directs otherwise. Any additional amounts awarded in excess of the standard base fee or for non-base fee services shall be paid as the court directs.

(b) COMPENSATION OF PROFESSIONALS IN CHAPTER 7, 11, AND 12 CASES. The bankruptcy administrator's Procedures for Preparing and Submitting Applications for Compensation by Professionals shall serve as a guide for applications for compensation to professionals. Absent an order to the contrary, professionals may apply for compensation once every sixty (60) days. The Procedures for Preparing and Submitting Applications for Compensation by Professionals outline is available from the office of the bankruptcy administrator.

(c) REIMBURSEMENT OF FEES PAID TO THE COURT. Unless otherwise ordered, an attorney for the debtor shall be allowed, without application, to receive payment or reimbursement from or on behalf of the debtor for court fees paid by the attorney to the court on behalf of the debtor. In chapter 13 cases, the debtor's attorney shall file a notice with the court stating the amount and purpose of the fee. The chapter 13 trustee shall provide for payment of that fee through plan distribution.

(d) FLAT FEE COMPENSATION OF ATTORNEYS IN CHAPTER 11 CASES. Counsel for a chapter 11 debtor may apply to be employed on a flat-fee basis, with flat-fee compensation not to exceed $20,000, as follows:

(1) Notice of an application to employ counsel for the debtor on a flat-fee basis shall be provided to all creditors and the bankruptcy administrator.

(2) All retainer funds must be held in trust by counsel and may be withdrawn only according to the following schedule:

(A) One-fifth (1/5) for pre-petition services (full and complete petition including schedules and statements) to be withdrawn only after filing complete schedules and statements with the court;

(B) One-fifth (1/5) after the completed 341 meeting of creditors;

(C) One-fifth (1/5) after the filing of the plan and disclosure statement;

(D) One-fifth (1/5) after the hearing on confirmation of the plan and disclosure statement or, if the plan is not confirmed, upon conversion or dismissal of the case; and

(E) One-fifth (1/5) upon entry of the final decree.

(3) Upon proper application, the court will consider the award of reasonable fees for services performed after confirmation if a final decree is not obtained, or the case is converted or dismissed.

(4) Upon each withdrawal, counsel shall file a Rule 2016 Disclosure Statement that includes a detailed list of the services rendered, time expended (if available), expenses incurred, and amount paid from trust.

(5) Any party in interest, including the bankruptcy administrator, may review the fees upon completion of services or after the conclusion of such employment to determine whether the flat fee is reasonable in light of unanticipated developments at the time of the approval of the terms and conditions of employment pursuant to 11 U.S.C. § 328(a). If the flat fee exceeds the reasonable value of services, the court may require the attorney to return the fee to the extent that it is excessive pursuant to § 329(b). If the attorney does not properly represent the debtor after approval of the flat fee, the approved fee would not be deemed reasonable under § 330(a)(3) and is subject to adjustment.

(6) This rule does not preclude application for a flat fee higher than $20,000 under appropriate circumstances.

(7) The reimbursement of expenses may be addressed in the original application or by separate application.

(e) DISCLOSURE OF COMPENSATION.

(1) If an attorney commences representation of a debtor in a case, or in connection with a case, after the filing of a voluntary petition or the order for relief, the attorney shall file a Fed. R. Bank. P. 2016(b) disclosure within 14 days from the date representation begins.

(2) Within 14 days after modification of or amendment to any compensation agreement or payment not previously disclosed, an attorney representing a debtor shall file a supplemental disclosure.

(3) A supplemental statement of compensation under Fed. R. Bank. P. 2016(b) is not required for a payment made by the debtor to the debtor's attorney pursuant to an order allowing compensation entered by the court or, in a chapter 11 case, for any payment disclosed within a monthly operating or post confirmation report filed by the debtor.