Central District Consumer Bankruptcy Attorney's Association

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Mike, I have wondered the same thing.
In law school we were taught that attorneys can give other attorneys
referral fees.
On the chapter 7 forms, there is a check box for whether the attorney of
record compensated any other person with respect to that case. Why would
this check box be on the forms if it were illegal for an attorney to give a
referral fee to another attorney for referring a chapter 7.
I don't know if it is a violation of the California Rules of Professional
Conduct for an attorney to give another attorney a referral fee for
referring a chapter 7 case.
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Hello Everyone,
I am doing a research project on referral fees but I am very unfamiliar
with Chapters 7 and 13. Maybe someone can point me in the right direction?
In a Chapter 11, the Debtor hires an attorney pursuant to Section 327 and
subject to Section 330. Thats fine, I understand Chapter 11.
In a Chapter 7, what right does the Debtor have to hire or pay for an
attorney? The fee is paid up front so is the attorney just completing its
work for payment that it received prepetition?
In a Chapter 13, what right does the Debtor have to hire an attorney to pay
for the RARA type work? Is the attorney hired pursuant to Section 1303 and
thereby Section 363(b)?
The reason I ask is there is a prohibition on sharing compensation for
attorneys under the bankruptcy code. Section 504 provides, in part, that a
person receiving compensation or reimbursement under Section 503(b)(2) may
not share or agree to share any such compensation or reimbursement with
another person. Section 503(b)(2) refers to compensation and reimbursement
awarded under Section 330(a) of this title. Section 330 covers the awarding
of compensation to (among others) professional persons employed under
Section 327. Section 327 is what allows a Trustee to employ his or her
attorney and under Chapter 11, the Debtor acts in the place of a Trustee as
a Debtor-In-Possession. Hence attorneys employed under 327 (Chapter 11
Debtors attorneys) are not allowed to give referral fees.

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