What Happens If No Payment Is Made On A Promissory Note?

A promissory note is a binding legal document. Your promissory note should be tailored to the specifics of the transaction you are involved in. Simple payments from friends can serve as promissory notes. Promissory notes that cover information like interest rates, amortization schedules and more are necessary for transactions like auto loans and mortgages. You can easily get a simple promissory note sample online, at any of the websites where templates of legal forms and documents are available for free.

What Happens in Case of Non-Payment of a Promissory Note?

Failure to repay a loan specified in a promissory note may result in the loss of a secured asset, such as a home, or other consequences. If someone you have loaned money to is not repaying you, you have some options. You should first make a written request for the repayment. You might only need to send a written reminder to get your money back. Commonly, past-due notices are sent 30, 60, and 90 days after the deadline.

You might think about requesting a partial payment from your borrower if they continue to not repay you. If you choose to accept a debt's partial repayment, you can draught a debt settlement agreement. You might also think about establishing an extended plan for payment that enables the borrower to repay you in full over a new time frame. To protect yourself, be sure to include all pertinent information while writing a promissory note. To get assistance with the drafting of your document, contact an experienced attorney. Or download a note from a free legal form website.

A debt collector is another option you have if you want to get payment. In order to collect the note, a debt collector collaborates with you and typically retains a portion of the cash. You can also sell the note to a debt collector as an alternative. A debt collector who purchases a note from a borrower acquires ownership of the loan and gains the right to gather the full amount.

You may also consider suing your borrower for the entire amount that is owed to you, if nothing else succeeds.