ENGAGEMENT LETTER — BANKRUPTCY

Firm Letterhead

[FIRM NAME]
[FIRM ADDRESS LINE 1]
[FIRM ADDRESS LINE 2]
[CITY], [STATE] [ZIP CODE]
Telephone: [____________________]
Facsimile: [____________________]
Email: [____________________]
Website: [____________________]

Date: [__/__/____]

VIA [HAND DELIVERY / CERTIFIED MAIL / EMAIL]

[CLIENT FULL LEGAL NAME]
[CO-DEBTOR FULL LEGAL NAME (if applicable)]
[CLIENT ADDRESS LINE 1]
[CLIENT ADDRESS LINE 2]
[CITY], [STATE] [ZIP CODE]
Re: Engagement for Bankruptcy Legal Services — [CHAPTER 7 / CHAPTER 13 / CHAPTER 11 / PRE-FILING CONSULTATION]
Our File No.: [________________________________]

Dear [CLIENT NAME]:

Thank you for selecting [LAW FIRM NAME] ("Firm," "we," or "us") to represent you in your bankruptcy matter. This Engagement Letter, together with the attached Fee Agreement and Required Bankruptcy Disclosures, sets forth the terms and conditions under which the Firm will provide legal services to you ("Client," "Debtor," or "you"). Please read this letter carefully and contact us with any questions before signing.

IMPORTANT NOTICE: Federal law requires the Firm to disclose all compensation paid or agreed to be paid for services rendered in connection with your bankruptcy case. This disclosure will be filed with the Bankruptcy Court and the United States Trustee pursuant to 11 U.S.C. § 329 and Fed. R. Bankr. P. 2016(b). The Bankruptcy Court has authority to review and modify attorney compensation.

This letter constitutes a binding agreement between you and the Firm. Please retain a copy for your records.

1. SCOPE OF REPRESENTATION

1.1 Chapter and Case Type

The Firm agrees to represent you in connection with a:

☐ Chapter 7 — Liquidation
☐ Chapter 13 — Individual Debt Adjustment (Wage Earner Plan)
☐ Chapter 11 — Reorganization (Individual or Business)
☐ Chapter 12 — Family Farmer or Fisherman
☐ Pre-Filing Consultation Only — Case analysis and counseling; filing requires a separate written agreement

Filing Jurisdiction: United States Bankruptcy Court for the [________________________________] District of [________________________________]

1.2 Services Included

The Firm will provide the following services (check all that apply):

Pre-Filing Services:
☐ Initial bankruptcy consultation and case analysis
☐ Determination of eligibility (including means test analysis under 11 U.S.C. § 707(b))
☐ Evaluation of Chapter 7 vs. Chapter 13 options
☐ Review of debts, assets, income, and expenses
☐ Identification and maximization of applicable exemptions
☐ Pre-filing credit counseling coordination (required under 11 U.S.C. § 109(h))
☐ Counseling regarding alternatives to bankruptcy (negotiation, consolidation, etc.)
☐ Pre-filing asset protection planning (within legal and ethical limits)

Petition Preparation and Filing:
☐ Preparation of voluntary petition, schedules, statements, and all required official forms
☐ Preparation of Statement of Financial Affairs (SOFA)
☐ Preparation of means test form (Official Form 122A or 122C)
☐ Filing of petition and all required documents with the Bankruptcy Court
☐ Filing of required compensation disclosure (Rule 2016(b) Statement)
☐ Payment of filing fee or application for installment payments / fee waiver

Post-Filing Services:
☐ Attendance and preparation for Section 341 Meeting of Creditors
☐ Communications with the Chapter 7 or Chapter 13 Trustee
☐ Review of claims filed by creditors
☐ Response to routine Trustee requests for documentation
☐ Preparation and filing of amended schedules (if necessary)
☐ Coordination of debtor education course completion (required under 11 U.S.C. § 727(a)(11) or § 1328(g))

Chapter 13-Specific Services (if applicable):
☐ Preparation and filing of Chapter 13 plan
☐ Attendance at plan confirmation hearing
☐ Responses to objections to plan confirmation
☐ Plan modifications (if necessary for confirmation)
☐ Motions to modify plan post-confirmation (limited to [____] modification(s))

Additional Services (if checked):
☐ Motions to avoid liens (11 U.S.C. § 522(f))
☐ Motions to value collateral (Chapter 13 "cramdown")
☐ Reaffirmation agreement review and counseling
☐ Redemption of personal property (11 U.S.C. § 722)

1.3 Matters Expressly Excluded

Unless separately agreed to in writing and subject to additional fees, the following are not included in this engagement:

• Adversary proceedings (preference actions, fraudulent transfer claims, lien avoidance beyond § 522(f), dischargeability challenges, objections to discharge)
• Contested matters (motions for relief from stay, objections to exemptions, objections to claims requiring evidentiary hearings)
• Appeals from any Bankruptcy Court order
• Post-discharge motions or enforcement actions
• Conversion of case from one chapter to another (unless checked above)
• Tax advice, tax return preparation, or representation before the IRS
• Business operations, management, or wind-down services
• Real estate matters (loan modifications, short sales, foreclosure defense outside bankruptcy)
• Student loan adversary proceedings (Brunner / undue hardship analysis)
• Litigation related to preferential or fraudulent transfers
• Representation of non-filing spouse, co-debtors, or guarantors
• Any matter arising after entry of discharge or case closing

2. MANDATORY PRE-FILING REQUIREMENTS

2.1 Credit Counseling (Pre-Filing)

Under 11 U.S.C. § 109(h), you may not file a bankruptcy petition unless you have received an individual or group briefing from an approved nonprofit budget and credit counseling agency within 180 days before filing. You must provide the Firm with the certificate of completion before the petition can be filed.

Approved agencies can be found at: https://www.justice.gov/ust/list-credit-counseling-agencies-approved-pursuant-11-usc-111

☐ Client has completed credit counseling. Certificate dated: [__/__/____]
☐ Client has not yet completed credit counseling and will do so before filing.

2.2 Debtor Education (Post-Filing)

Under 11 U.S.C. § 727(a)(11) (Chapter 7) and § 1328(g) (Chapter 13), you must complete an approved debtor education (financial management) course after filing and before receiving a discharge. Failure to complete this course will result in the denial of your discharge.

☐ Client understands the debtor education requirement and will complete the course timely.

2.3 Tax Return Requirements

Under 11 U.S.C. § 521(e) and (f), you must provide the Trustee with copies of your most recent federal income tax return (or transcript) at least 7 days before the Section 341 Meeting. Failure to comply may result in dismissal of your case.

☐ Client will provide tax returns for the prior [____] year(s) as required.

3. FEE ARRANGEMENT

3.1 Compensation Disclosure

MANDATORY DISCLOSURE UNDER 11 U.S.C. § 329 AND FED. R. BANKR. P. 2016(b): The Firm is required to disclose to the Bankruptcy Court and the United States Trustee all compensation paid or agreed to be paid for services rendered in contemplation of and in connection with this bankruptcy case. This disclosure will be filed within 14 days after the order for relief (filing of the petition). The Bankruptcy Court may review the reasonableness of fees and may order the return of compensation found to exceed the reasonable value of services.

3.2 Fee Structure

☐ Flat Fee — Chapter 7:
Total attorney fee: $[________]
- Paid before filing: $[________]
- Balance (if any): $[________], due by [__/__/____]

☐ Flat Fee — Chapter 13:
Total attorney fee: $[________]
- Paid before filing: $[________] (the "base fee")
- Balance of $[________] to be paid through the Chapter 13 plan (subject to court approval)

☐ Hourly Fee (Chapter 11 or complex matters):
Attorney rates: $[____]/hour for partners; $[____]/hour for associates; $[____]/hour for paralegals.
Retainer deposit: $[________], to be held in the Firm's client trust account.

☐ Pro Bono / Reduced Fee:
This matter is being handled on a pro bono or reduced fee basis. Fee: $[________] or waived.

3.3 Filing Fees (Paid to the Court)

Current Bankruptcy Court filing fees (as of the date of this letter):

Filing fees are set by 28 U.S.C. § 1930 and may change. These fees are paid directly to the Court and are separate from the Firm's attorney fees. Installment payment of filing fees may be available upon application to the Court.

3.4 Other Costs and Expenses

You are responsible for the following additional costs (as applicable):

☐ Credit counseling course fee (typically $10–$50)
☐ Debtor education course fee (typically $10–$50)
☐ Credit report fee: $[________]
☐ Tax transcript request fee (IRS Form 4506-T)
☐ Notary fees
☐ Copying and document production costs
☐ Postage and courier charges
☐ Real property appraisal fees (if needed for exemptions)
☐ Vehicle valuation report fees
☐ Any additional Court fees (motions, amendments)

3.5 Additional Fees for Excluded Services

If services beyond the scope defined in Section 1 become necessary, the Firm will notify you of the additional fees before commencing work. Common additional fee amounts:

4. CLIENT RESPONSIBILITIES

4.1 Duty of Full Disclosure

THIS IS YOUR MOST IMPORTANT OBLIGATION. You must disclose all assets, debts, income, expenses, and financial transactions completely and accurately. Bankruptcy fraud is a federal crime punishable by fines and imprisonment under 18 U.S.C. § 152. Specifically, you must:

☐ Disclose all property owned or controlled, regardless of value or location (including property held in trust, property in another person's possession, and interests in real or personal property)
☐ Disclose all debts and financial obligations, including contingent and unliquidated claims
☐ Disclose all sources of income for the current and prior year(s)
☐ Disclose all financial transactions for the prior 2–10 years as required by the Statement of Financial Affairs
☐ Disclose all transfers of property within 2 years prior to filing (or longer for insider transfers)
☐ Disclose all lawsuits, garnishments, and collection actions
☐ Disclose all prior bankruptcy filings

4.2 Document Production

You must promptly provide the following to the Firm:

☐ Federal and state income tax returns for the prior [____] years
☐ W-2s, 1099s, and other income documentation
☐ Pay stubs for the 6 months prior to filing (required under 11 U.S.C. § 521(a)(1)(B)(iv))
☐ Bank statements for all accounts for the prior [____] months
☐ Investment and retirement account statements
☐ Mortgage statements and property tax bills
☐ Vehicle titles and loan statements
☐ Credit card and other debt statements
☐ Lawsuit papers, garnishment orders, and collection notices
☐ Business financial records (if self-employed or operating a business)
☐ Domestic support obligation documentation (child support, alimony)
☐ Insurance policies (life, property, vehicle)
☐ Social Security statements or benefit award letters
☐ Any pending or anticipated personal injury claims
☐ Prior bankruptcy petitions and discharge orders

4.3 Ongoing Obligations During the Case

☐ Attend the Section 341 Meeting of Creditors (mandatory — failure to appear may result in case dismissal)
☐ Attend any court hearings as required
☐ Respond promptly to Trustee requests for documents or information
☐ File all tax returns that become due during the pendency of the case
☐ Complete the debtor education course and provide the certificate to the Firm
☐ Notify the Firm immediately of any change in income, employment, address, or financial circumstances
☐ Continue making Chapter 13 plan payments (if applicable)
☐ Do not incur new debt exceeding $[________] without Trustee or Court approval (Chapter 13)
☐ Do not sell, transfer, or dispose of property without authorization

5. RISKS AND DISCLOSURES SPECIFIC TO BANKRUPTCY

5.1 No Guarantee of Discharge

The Firm cannot guarantee that you will receive a discharge or that any specific debt will be discharged. Grounds for denial of discharge include (11 U.S.C. § 727(a)):

• Fraudulent transfers or concealment of assets
• Destruction or concealment of books and records
• False oath or account
• Failure to explain loss of assets
• Refusal to obey court orders
• Failure to complete the debtor education course

5.2 Non-Dischargeable Debts

Certain debts are generally not dischargeable in bankruptcy, including but not limited to:

• Most student loans (unless undue hardship is proven)
• Recent income tax debts (generally within 3 years)
• Child support and alimony (domestic support obligations)
• Debts arising from fraud, embezzlement, or larceny
• Debts arising from willful and malicious injury
• Government fines and penalties
• Debts from DUI/DWI judgments
• Debts not listed in the bankruptcy schedules (in certain circumstances)

5.3 Automatic Stay

Upon filing, the automatic stay under 11 U.S.C. § 362 generally prohibits creditors from taking collection action against you. However:

• The stay may not apply to certain actions (e.g., criminal proceedings, domestic support collection, certain tax proceedings)
• Creditors may file motions for relief from the automatic stay
• If you have filed a prior bankruptcy case that was dismissed within the preceding year, the stay may be limited to 30 days (11 U.S.C. § 362(c)(3)) or may not go into effect at all (§ 362(c)(4))

5.4 Impact on Credit

Filing bankruptcy will appear on your credit report for up to 10 years (Chapter 7) or 7 years (Chapter 13) from the date of filing. This may affect your ability to obtain credit, housing, employment, and insurance.

5.5 Loss of Property

• Chapter 7: Non-exempt property may be liquidated by the Trustee to pay creditors. The Firm will work to maximize your exemptions, but certain assets may be at risk.
• Chapter 13: You generally retain your property but must pay creditors the value of non-exempt assets through your plan.

5.6 Tax Consequences

Discharged debt may be treated as taxable income under certain circumstances. Certain bankruptcy exemptions under the Internal Revenue Code may apply. The Firm does not provide tax advice. You should consult a tax professional.

5.7 Effect on Co-Debtors and Guarantors

Your bankruptcy filing may not protect co-signers, guarantors, or co-debtors from collection. In Chapter 13, the co-debtor stay (11 U.S.C. § 1301) provides limited protection. Co-debtors should be advised to seek independent legal counsel.

6. COMMUNICATION POLICY

6.1 Primary Communication Method

☐ Email: [________________________________]
☐ Telephone: [________________________________]
☐ Client portal: [________________________________]
☐ U.S. Mail

6.2 Response Times

The Firm will respond to communications within [____] business days. Urgent matters (e.g., pending foreclosure, garnishment, repossession) will be addressed as soon as practicable. You should respond to Firm communications within [____] business days.

6.3 Creditor Contact

After your case is filed, creditors should be directed to the Firm. If you receive any communication from a creditor after filing, forward it to the Firm immediately.

7. CONFLICTS OF INTEREST

7.1 Conflict Check

The Firm has conducted a conflict check and, based on information currently available, has identified:

☐ No conflicts of interest
☐ The following potential conflict(s), which have been disclosed and waived: [________________________________]

7.2 Joint Debtor Representation

If the Firm is representing both you and your spouse (or co-debtor) in a joint petition:

☐ Joint representation acknowledged: You understand that the Firm represents both debtors. If a conflict of interest arises between the joint debtors, the Firm may be required to withdraw from representing one or both parties.
☐ Not applicable — single filer.

7.3 Representation of Debtor Only

The Firm represents only the Debtor(s) identified in this letter. The Firm does not represent any creditor, trustee, or other party in interest. If you are a business owner, the Firm represents you individually unless a separate engagement for the business entity is established.

8. TERMINATION OF REPRESENTATION

8.1 Client's Right to Terminate

You may terminate this engagement at any time by providing written notice. Fees earned and costs incurred through termination are due immediately. If a flat fee has been paid and the petition has not been filed, the Firm will refund any unearned portion.

8.2 Firm's Right to Withdraw

The Firm may withdraw from representation as permitted by the Rules of Professional Conduct and the Bankruptcy Court's local rules. After a petition is filed, withdrawal generally requires court approval. Grounds for withdrawal include failure to cooperate, failure to pay fees, failure to provide required documents, or conduct making continued representation unreasonably difficult.

8.3 Effect of Termination After Filing

If you terminate the Firm after the petition is filed, you should promptly retain substitute counsel. Certain deadlines and obligations continue to run regardless of whether you have counsel. Failure to appear at hearings or respond to Trustee requests may result in dismissal of your case.

9. FILE RETENTION AND DESTRUCTION

The Firm will retain your file for [____] years after the conclusion of the matter (case closing, discharge, or dismissal). After that period, the file may be destroyed. You are encouraged to obtain copies of important documents, including your discharge order, at the conclusion of the case.

10. DISPUTE RESOLUTION REGARDING FEES

In bankruptcy cases, the Bankruptcy Court retains jurisdiction to review attorney fees. You also have the right to:

☐ Request the Court to review attorney compensation under 11 U.S.C. § 329
☐ Submit fee disputes to the state bar fee arbitration program
☐ Other: [________________________________]

11. NO GUARANTEE OF OUTCOME

THE FIRM MAKES NO PROMISES OR GUARANTEES REGARDING THE OUTCOME OF YOUR BANKRUPTCY CASE, INCLUDING WHETHER YOU WILL RECEIVE A DISCHARGE, WHETHER A CHAPTER 13 PLAN WILL BE CONFIRMED, OR WHETHER ANY SPECIFIC DEBT WILL BE DISCHARGED. Results depend on the facts, the law, and the exercise of judicial discretion.

12. MULTI-STATE JURISDICTION NOTES

12.1 Exemption Laws

Bankruptcy exemptions vary significantly by state and determine which property you can protect from creditors:

• Some states allow debtors to choose between federal bankruptcy exemptions (11 U.S.C. § 522(d)) and state exemptions; other states require the use of state exemptions.
• You must have been domiciled in a state for at least 730 days (2 years) before filing to use that state's exemptions (11 U.S.C. § 522(b)(3)(A)).

12.2 California

• California offers two alternative exemption schemes: CCP § 703.140 ("System 1") and CCP §§ 704.010–704.210 ("System 2"). Debtors must elect one system.
• Written fee agreements are required under Cal. Bus. & Prof. Code § 6148.
• California has robust homestead exemptions that were significantly increased effective January 1, 2021 (CCP § 704.730).
• The Central District of California uses local forms for attorney compensation disclosure.

12.3 New York

• 22 NYCRR Part 1215 requires written engagement letters for matters exceeding $3,000.
• New York does not allow use of federal bankruptcy exemptions — debtors must use state exemptions under N.Y. Debt. & Cred. Law §§ 282–284 and other applicable statutes.
• Southern District of New York and Eastern District of New York have specific local rules regarding attorney compensation and "no-look" fee guidelines.

12.4 Texas

• Texas provides some of the most generous exemptions in the country, including an unlimited homestead exemption (with acreage limits) under Tex. Prop. Code § 41.001.
• Texas Disciplinary Rules of Professional Conduct, Rule 1.04, governs fee arrangements.
• Texas does not allow use of federal bankruptcy exemptions.

12.5 Florida

• Florida provides an unlimited homestead exemption under Fla. Const. Art. X, § 4, subject to the 1,215-day rule for new Florida residents (11 U.S.C. § 522(b)(3)(A) and (p)).
• Florida Bar Rule 4-1.5 governs fee agreements; nonrefundable flat fees have specific requirements.
• Florida does not allow use of federal bankruptcy exemptions.
• Middle District of Florida, Southern District of Florida, and Northern District of Florida each have local rules regarding attorney fee guidelines and compensation disclosure.

13. ACKNOWLEDGMENT AND ACCEPTANCE

By signing below, you acknowledge that:

☐ You have read and understand this Engagement Letter, the Fee Agreement, and the Bankruptcy Disclosures
☐ You understand that the Firm must disclose all compensation to the Bankruptcy Court under 11 U.S.C. § 329 and Fed. R. Bankr. P. 2016(b)
☐ You understand the mandatory pre-filing credit counseling and post-filing debtor education requirements
☐ You understand your duty to fully and truthfully disclose all assets, debts, income, and financial transactions
☐ You understand that bankruptcy fraud is a federal crime
☐ You understand the scope of representation, including what is and is not covered
☐ You understand the fee arrangement and your responsibility for costs
☐ You understand that the Firm cannot guarantee any outcome, including discharge
☐ You have received a copy of this Engagement Letter and all attachments

Signature Block

AGREED AND ACCEPTED:

DEBTOR:

____________________________________________
[DEBTOR FULL LEGAL NAME] (Printed)

____________________________________________ Date: [__/__/____]
[DEBTOR SIGNATURE]

Social Security Number (last 4 digits): XXX-XX-[____]
(Required for bankruptcy filing; will be kept confidential)

CO-DEBTOR (Joint Filing):

____________________________________________
[CO-DEBTOR FULL LEGAL NAME] (Printed)

____________________________________________ Date: [__/__/____]
[CO-DEBTOR SIGNATURE]

Social Security Number (last 4 digits): XXX-XX-[____]

ATTORNEY:

____________________________________________
[ATTORNEY NAME], Esq.
[LAW FIRM NAME]

____________________________________________ Date: [__/__/____]
[ATTORNEY SIGNATURE]

14. ATTACHMENTS CHECKLIST

The following documents are attached to and incorporated by reference into this Engagement Letter:

☐ Fee Agreement (flat fee or hourly terms, as applicable)
☐ Disclosure of Compensation Under 11 U.S.C. § 329 and Fed. R. Bankr. P. 2016(b) (for Court filing)
☐ State-Required Fee Disclosures (CA: Bus. & Prof. Code § 6148; NY: 22 NYCRR 1215; FL: Bar Rule 4-1.5)
☐ Notice Regarding Bankruptcy Assistance (11 U.S.C. § 527 Disclosure)
☐ Bankruptcy Information Sheet (11 U.S.C. § 342(b) Notice)
☐ Credit Counseling Information and Approved Agency List
☐ Debtor Education Course Information and Approved Provider List
☐ Document Checklist for Bankruptcy Filing
☐ Conflict of Interest Waiver (if applicable — joint filing)
☐ Privacy Policy / Electronic Communication Consent Form
☐ Fee Arbitration Notice (as required by applicable state bar rules)

SOURCES AND REFERENCES

• ABA Model Rules of Professional Conduct: https://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/
• 11 U.S.C. § 329 (Debtor's Transactions with Attorneys): https://www.law.cornell.edu/uscode/text/11/329
• Fed. R. Bankr. P. 2016 (Compensation Disclosure): https://www.law.cornell.edu/rules/frbp/rule_2016
• 11 U.S.C. § 109(h) (Credit Counseling Requirement): https://www.law.cornell.edu/uscode/text/11/109
• 11 U.S.C. § 707(b) (Means Test): https://www.law.cornell.edu/uscode/text/11/707
• 11 U.S.C. § 362 (Automatic Stay): https://www.law.cornell.edu/uscode/text/11/362
• 11 U.S.C. § 727 (Discharge — Chapter 7): https://www.law.cornell.edu/uscode/text/11/727
• Credit Counseling Approved Agencies: https://www.justice.gov/ust/list-credit-counseling-agencies-approved-pursuant-11-usc-111
• Debtor Education Approved Providers: https://www.justice.gov/ust/list-approved-providers-personal-financial-management-instructional-courses
• U.S. Courts Bankruptcy Basics: https://www.uscourts.gov/court-programs/bankruptcy/bankruptcy-basics
• 28 U.S.C. § 1930 (Bankruptcy Fees): https://www.law.cornell.edu/uscode/text/28/1930
• California CCP § 703.140 and §§ 704.010–704.210 (Exemptions): https://leginfo.legislature.ca.gov
• 22 NYCRR Part 1215 (NY Engagement Letters): https://www.law.cornell.edu/regulations/new-york/22-NYCRR-1215.1
• Texas Property Code § 41.001 (Homestead): https://statutes.capitol.texas.gov/Docs/PR/htm/PR.41.htm
• Florida Constitution Art. X, § 4 (Homestead): http://www.leg.state.fl.us/statutes/index.cfm?submenu=3#A10S04