In re Murray (05-48017)

Debtors filed a Motion to Abrogate the Administrative Order of January 3, 2005, which set forth the procedure for payment of debtors’ attorneys fees in Chapter 13 cases. After consideration of Debtors’ evidence of the increased burden on debtors’ counsel under the Bankruptcy Abuse Prevention and Consumer Protection Act (“BAPCPA”), the Court held that the Administrative Order should not be abrogated, but should be amended to allow the payment of $2,500 to debtors’ counsel in Chapter 13 cases without separate application or hearing (i.e., “no-look” fee). The Court is convinced that its modification of the Administrative Order will strike a much-needed balance between debtors’ interests in proposing and completing a successful Chapter 13 plan, secured creditors’ interests in recoupment despite oftentimes rapidly depreciating collateral, and bankruptcy attorneys’ interests in being fairly compensated for the vital service they provide to debtors. Along with an increase in the no-look fee, the Court amended the Administrative Order to increase the amount of the initial disbursement, the monthly payments, and the fee due in dismissed cases. Individuals should reference the Amended Administrative Order for specifics.

Friday, July 28, 2006