Re: does Promissory Note have any legal affect?


"dave" <dyu9999@xxxxxxxxx> wrote in message
news:1133289393.676946.159350@xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
>> I loan someone certain amount of money and get paid interest on this, i
> have a promissory note contracting this and it is notarized. It also
> mentioned in case of his death, I can collect my principle back etc
> etc.
>
> I am wondering does this note have any legal affect? hyporthetically,
> in case of his death, can I use this note to go to court to collect my
> principle ?

Yes, it should have legal effect. (Even if the note is somehow invalid, you
might still have a legally valid debt if you loaned the momey with the
understanding it would be repaid, but it might be harder to prove.) If the
estate has adequate assets for your type of unsecured debt, then you should
be able to collect on it. If the person dies, you will probably need to make
some sort of claim in probate court in accordance with the rules applicable
wherever the probate has been filed.

>
> If not, what kind of document should I make for this loan to protect
> myself in case of unexpected thigns.

It might be too late if you've already made the loan but you can usually
better protect yourself by getting the note secured by property he owns. For
instance, if you loaned the money to help him buy a car, you might be able
to negotiate a security interest in it (or other property he owns). If he
defaults on the note, then you can recover the property and sell it to
satisfy the note. If there's a shortfall, you can usualy go after the debtor
or his estate to recover that. (If there's a surplus, you have to refund it
less costs.)


.

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