In re Putnal (11-53874)

Loan agreement between the debtor and oversecured creditor provided for 15% attorney fees. Such attorney fees are only enforceable under state law if perfected by a notice that gives the debtor 10 days to avoid the fees by paying the debt in full. The creditor did not send the 10-day notice prior to the petition date, yet requested the contractual amount of attorney fees pursuant to 11 USC ยง 506(b). The Court allowed attorney fees, but limited them to an amount determined to be reasonable.

Tuesday, November 12, 2013