How Debtor Attorneys Get Paid on Post-Petition Work
Watch the interview below with Larry Friedman, former Director of the Executive Office for U.S. Trustees and now Chief Strategist at Invoygo. We talk through how debtor attorneys can: 1) set client expectations, 2) use a payment portal, and 3) raise collection rates without hiring a big in-house collections team.
Here are a few of the questions answered during this podcast.
Frequently Asked Questions
- How do debtor attorneys get paid reliably on post-petition work?
- What does a payment portal need to include for bankruptcy clients?
- Who follows up when a payment fails?
- Do bankruptcy clients really want to pay their lawyers?
- What collection rates should a firm expect on post-petition plans?
- How should I talk about money without sounding like a collector?
- What should my intake or legal team say about payments during active work?
- How much do merchant fees cost and how do third-party services compare?
- How can a firm test a payments platform without big risk?
- What client scripting helps prevent first-payment defaults?
FAQ: How do debtor attorneys get paid reliably on post-petition work?
Getting paid reliably on post-petition work starts with clear expectations and an easy way to pay. Set a firm service-for-fee agreement, confirm the amount and cadence the client can handle, and route payments through a client portal that supports reminders and card updates.
Reinforce that payment is part of the professional relationship, the same as any service the client provides in their own job. When payment is simple and expectations are clear, clients are more likely to follow through.
FAQ: What does a payment portal need to include for bankruptcy clients?
A useful portal lets clients log in, see their contract, make full or partial payments, update cards, and message support. It should send friendly pre-debit notices a few days before each charge and quick reminders after a miss. Keep date changes and edge cases with your support team so controls stay tight while clients get flexibility.
FAQ: Who follows up when a payment fails?
Follow up lives with the system first and your team second. Automated notices should go out immediately, and staff should check the portal before or during routine case calls to confirm whether the payment landed.
If it did not, bring it up calmly: “I noticed last month’s payment didn’t process. Can I help you update your card?” This defuses pressure and opens the conversation.
FAQ: Do bankruptcy clients really want to pay their lawyers?
Yes. Clients value the relief you deliver and expect to compensate you for it. Position the fee next to the outcome. A client discharging $25,000 to $75,000 in debt sees a $2,400 fee as reasonable when you explain the support and results.
FAQ: What collection rates should a firm expect on post-petition plans?
Firms that communicate well and use a portal commonly report 80–90% collection rates, with well-run programs breaking 90%. Prevent first-payment defaults: confirm affordability up front, schedule the first draft quickly, and verify the payment hit before proceeding.
FAQ: How should I talk about money without sounding like a collector?
Recast financial obligations as part of client care: you’re helping them get relief, and payment is how you keep helping. Use plain language, empathy, and questions that check comfort and capacity.
Try: “Is $200 on the 15th still workable for you, or would biweekly $100s help while you get through the 341 period?”
FAQ: What should my intake or legal team say about payments during active work?
Tie payment checks to moments you already talk to clients. During the first 90 days—document requests, trustee questions, hearing prep—confirm the latest payment and use the portal as your single source of truth. If a payment failed, ask what changed and text the portal link so they can update the card while on the line.
FAQ: How much do merchant fees cost and how do third-party services compare?
Traditional card processing often lands near 3.1–3.5% plus monthly fees and compliance overhead. A serviced platform that bundles banking, compliance, support, and software may run about 6% of amounts collected. Compare total cost to net outcomes—if the platform lifts collection rates and replaces a dedicated collector, the delta can favor the platform.
FAQ: How can a firm test a payments platform without big risk?
Run a champion-challenger test: keep a control group on your current process and place a matched group on the platform for 60–90 days. Track first-payment success, total dollars collected, failed-payment recovery, and staff minutes. Choose the winner by net dollars after fees and labor.
FAQ: What client scripting helps prevent first-payment defaults?
Confirm comfort with amount and frequency, lock the first draft date, and send the portal login immediately. Add a short welcome note that frames the provider as a trusted partner. Include one or two lines in your engagement letter and a separate intro email. Tell clients how to text or call for help and what to do if a card changes.