Brooklyn attorney explains how to properly collect on a promissory note
If you are attempting to pursue payment from a party that defaulted on a promissory note, the Brooklyn commercial debt collections attorneys with the Bukh Law Firm, PLLC can help you explore your options and vigorously assert your legal rights.
What Exactly is a Promissory Note?
The term “promissory note” is lawyer-talk for a loan. Basically, it is a financial agreement between two or more people where one person agrees to pay an amount of money to another person sometime in the future. For example, a mortgage is considered to be a promissory note. Also, many businesses in Brooklyn routinely use promissory notes for short-term financing.
The terms of a promissory note usually include the following:
- The amount of the principal;
- The agreed upon interest rate; and
- The maturity date.
In certain circumstances, there will be provisions concerning the rights of the payee (i.e. the person or business making the loan) in the event a default occurs.
How To Collect on a Delinquent Promissory Note
The Collection Demand Letter in Brooklyn is a Promissory Note companion document legally advising the borrower of a late / default payment owed to the lender within a specified period of time. When completing a Promissory Note, an Installment Note also may accompany the original document to explain the payment schedule (amounts and dates) associated with a loan of money or exchange of personal property. This documentation will prove helpful in the event the lender must prepare a Collection Demand Letter for presentation or delivery to the borrower.
A Collection Demand Letter document will typically specify the following:
- Full, legal name of borrower
- Date of original loan transaction (from Promissory Note)
- Payment due date (established on Promissory Note and / or Installment Note)
- Past due payment amount (established on Promissory Note and / or Installment Note)
- Signature of lender
The simple version of the Collection Demand Letter will provide a written form of notification using the above referenced information. However, the Collection Demand Letter will simply state the borrower’s payment has not been received by the lender and is now due.
An expanded version of this letter will provide the lender a written form of notification to the borrower of a late payment, as well as a demand for payment in full within a specified period of time.
Depending on the specific language of the Collection Demand Letter, it may require of the borrower to immediately pay all principal, interest and any fees related to the original loan within the previously specified period of time. Additionally, notification of penalties, accrued interest and any applicable attorney’s fees related to recovery also may be imposed.
Take Action Today by Contacting an Experienced and Aggressive Brooklyn Lawyer for Your Commercial Debt Collection Matter
The Bukh Law Firm has the experience and dedication to help creditors with enforcing their rights against delinquent debtors in a myriad of situations.
Our team of legal professionals can help you devise a course of action tailored to your particular case while making the legal process as smooth and efficient as possible. Our Brooklyn commercial debt collections lawyers stand ready to help. Contact us today.