ILLINOIS BANKRUPTCY COURT LIMITS FEES CHARGED FOR CREDITOR NOTICES FINDING MOST TO BE “ABSURD” AND “EXCESSIVE”

Nisha Parikh
2 minutes ago
3 min read

The bankruptcy court for the Northern District of Illinois granted debtor, Sonia Pletz’s, request for a reduction and “cap” on fees and cost sought by Consumers Credit Union (“Consumers”) for preparation of several notices sent out during Pletz’s chapter 13 bankruptcy. In re: Pletz, Case No. 24 B 1199 (ND of Illinois E Div. April 23, 2026). Pletz filed her bankruptcy petition in 2024, and the court confirmed a plan to restructure Pletz’s debt over a 5-year period from October 2024 to October 2029.[1]

Included in the plan were monthly payments of $141 to Consumer, a secured creditor who issued a home-equity line of credit to Pletz. During the course of the bankruptcy, Consumer sent Pletz several notices, 29 of them in about eighteen months, advising of interest rate adjustments, newly incurred attorneys’ fees, and other post-petition expenses.[2] Due to the number and frequency of Consumer’s notices and the increasing fees associated with the notices, Pletz asked the court to determine what was owed to Consumer for the post-petition notices and to cap future notice-related expenses.[3]

The court reviewed each of the notices Consumer sent and surmised that most of them were not required by the loan documents and that the fees charged for the notices were excessive.[4] The court gave an example of an “absurd” rate change notice Consumer sent advising of a $0.01 payment increase which resulted in a $375 charge to Pletz.[5] Consumer rebutted that the notices were required by the loan documents but the court rejected that argument explaining the mortgage only required two annual fee notices and payment-change-notices only when a change was more than $10.00.

Ultimately, the court agreed with Pletz that Consumer’s $5,925.00 in post-petition charges were unreasonable and excessive so the court reduced the charges to $2,075.00.[6] The court also capped future charges at $100 per notice and advised the court would not allow charges for any notices that were not explicitly required by the loan documents.[7] This solution fits with court’s goal of ensuring a debtor who is diligent in complying with a restructuring plan can successfully complete the bankruptcy and get a fresh start.[8]

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The bankruptcy court for the Northern District of Illinois granted debtor, Sonia Pletz’s, request for a reduction and “cap” on fees and cost sought by Consumers Credit Union (“Consumers”) for preparation of several notices sent out during Pletz’s chapter 13 bankruptcy. In re: Pletz, Case No. 24 B 1199 (ND of Illinois E Div. April 23, 2026). Consumer was a secured creditor who issued a home-equity line of credit to Pletz.
During the course of the bankruptcy, Consumer sent Pletz several notices, 29 of them in about eighteen months, advising of interest rate adjustments, newly incurred attorneys’ fees, and other post-petition expenses. Due to the number and frequency of Consumer’s notices and the increasing fees associated with the notices, Pletz asked the court to determine what was owed to Consumer for the post-petition notices and to cap future notice-related expenses.
The court reviewed each of the notices Consumer sent and surmised that most of them were not required by the loan documents and that the fees charged for the notices were excessive. The court reduced the post-petition charges from $5,925.00 to $2,075.00 and capped future charges at $100 per notice.

1 In re: Pletz, at 1. Future references are to this citation until indicated otherwise.

2 In re: Pletz, at 3-4.

3 In re: Pletz, at 1.

4 In re: Pletz, at 4.

5 In re: Pletz, at 5. Future references are to this citation until indicated otherwise.

6 In re: Pletz, at 3, 8.

7 In re: Pletz, at 8.

8 In re: Pletz, at 1.