1997 #31, Juttelstad, 11-10-98

In re: LOUIS AND ELEANOR R. JUTTELSTAD, Chapter 13; Bankr. No. 97-40409

The matter before the Court is the Rule 2016(a) Application for Compensation and Reimbursement filed by Attorney John S. Harmelink on October 7, 1997 and Trustee Dale Wein's objection thereto. This is a core proceeding under 28 U.S.C. § 157(b)(2). This letter decision and accompanying Order shall constitute the Court's findings and conclusions under F.R.Bankr.P. 7052. As set forth below, the Court will approve Attorney Harmelink's fees in the amount requested but will order that the amount in excess of the plan estimate shall be paid by Debtors directly post-discharge.

Summary. Debtors' plan was confirmed by amended order entered October 14, 1997. Under the terms of their plan and the amended confirmation order, Debtors estimated that the fees owed to Attorney Harmelink were $1,620.00. The claim was to be satisfied through 27 monthly payments of $60.00 through the Chapter 13 Trustee. The plan and amended confirmation order also provided that unsecured creditors would be paid $60.00 per month for 33 months beginning after the attorney's fees were paid. Debtors also agreed in their plan to pay disposable income.

On October 7, 1997, Attorney Harmelink filed a fee application wherein he requested a total of $2,997.35. Trustee Wein objected on the grounds that only $1,600.00 was provided through the plan. Trustee Wein stated his objection would be satisfied if the remainder was paid by Debtors directly.

Discussion. If Attorney Harmelink's fee application had only varied from the estimate in the confirmed plan by a couple hundred dollars, the Court would be inclined to approve it. The Court recognizes that estimating these administrative costs is difficult. However, the Court will not approve these fees in excess of the plan estimate because to do so would eat up $1,377.35 in disposable income that was dedicated to unsecured creditors.

Further, there is nothing in this file or fee application to indicate why fees and costs were so high in this particular case. In this District, most Chapter 13 cases are handled for $1,000.00 or less. However, neither Debtors nor Trustee Wein have objected to the total fees sought so the amount will be not be reduced.

In this situation, where the fees requested vastly exceed the amount estimated in the plan but where no one has objected to the total amount sought, the Court will approve the fees as requested but will direct that the amount in excess of the plan estimate shall be paid by Debtors only after the five-year plan term ends. In future cases, the Court will not approve such high Chapter 13 fees unless they are better justified by the debtor's attorney.

An appropriate order will be entered.