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An Expensive Word

Changing one word in your loan documents could save you thousands of dollars if you sue borrowers in Kansas. That word is “reasonable”—as in whether your borrowers must pay for “reasonable” attorneys’ fees that you spend to collect their loans, rather than all of your costs of collection. Many standard-form loan documents entitle banks to recover only “reasonable” attorneys’ fees. But, with those loan documents, you bear the burden in Kansas of proving that fees are reasonable.

Carrying that burden often requires a lengthy, multi-factor legal analysis, which can be costly to prepare and — if it isn’t done correctly — can deprive you of a full recovery. Removing “reasonable” shifts the burden of proof in Kansas to your borrowers, requiring them to prove that your attorneys’ fees are unreasonable. Your legal position becomes stronger, as well as easier to present to a judge. And, courts in Kansas often enforce attorneys’ fees provisions regardless of whether contain “reasonable”.

So, by removing that word, you protect your investment in legal proceedings while streamlining the process of recovering that investment.