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Can a security agreement be contained in a promissory note or forbearance agreement?
Yes. A promissory note or forbearance agreement may be modified to include provisions that attached assets to the loan as security or collateral.
What happens to a promissory note when the debtor dies?
When a debtor who has issued a promissory note dies, the note typically becomes part of their estate. The estate is responsible for settling any outstanding debts, including the promissory note, before distributing assets to heirs. The creditor may seek repayment from the estate, and if the estate lacks sufficient assets, the debt may go unpaid. The terms of the note and local laws can influence the specific process and outcomes.
What is the definition of demand promissory note?
A promissory note is defined as an instrument in writing (not being a bank note or a currency note), containing an unconditional undertaking signed by the maker, to pay a certain sum of money only to or to the order of a certain person, or to the bearer of the instrument.
Would a promissory note be null and void if nothing was ever lent or borrowed?
A promissory note is an unconditional promise to pay a fixed amount at a fixed time accruing a fixed interest thereafter.Promissory notes differ from IOUs in that they contain a specific promise to pay, rather than simply acknowledging that a debt exists. In common speech, other terms, such as "loan," "loan agreement," and "loan contract" may be used interchangeably with "promissory note" but these terms do not have the same legal meaning.So the answer depends on whther this is a true promissory note or an instrument that was created to memorialize a transaction that wasn't completed.ClarificationThe answer is that if there is a fully executed promissory note then it can be enforced in court. A fully executed promissory note is absolute evidence that the borrower owes the lender. A defense that the borrower never received the money would be difficult to prove. If the funds were not transferred to the borrower there should not be a fully executed promissory note.First, the promissory note should only be signed by the borrower at the same time the funds are handed over. Second, if one was executed and the funds were not paid over to the borrower then the promissory note should not be signed by the borrower and if signed, it should be destroyed since the loan was not completed.
What is the maximum allowable interest rate on a promissory note between two private parties in the state of Georgia?
If the promissory note is for less than $3,000, the maximum allowable interest rate in Georgia is 16% per year. If the promissory note is for $3,000 or more, the maximum allowable interest rate in Georgia is 60% (yes - 60%) per year and may only be computed as simple interest.
Does a promissory note need to be notarized in Washington state?
In Washington state, a promissory note does not need to be notarized to be legally enforceable. However, notarization can provide additional legal protection and may be required by some lenders for their internal processes. It's always advisable to consult with a legal professional to ensure that the note meets all necessary legal requirements.
Understanding a Promissory Note?
A promissory note is a signed note from one person to the other guaranteeing (promising) to pay an exact amount of money when it comes due or upon demand by the lender. Promissory notes are legally binding. That means if a borrower signs the note and does not pay the money back as promised, regardless of whether it is an individual or a business loan, the lender may sue in court for the amount of money owed. Promissory notes are much like a contract and can be used in various situations to meet one end. The end is to gain a written promise of payment from any source. For instance, bill collectors will often ask past due customers to sign a promissory note as a promise to pay back money owed. The note can later be used in court if necessary on the bad debt. A promissory note has several bits of information that seal the agreement. The first thing on the note is the principal amount owed. The principal is the actual amount of money borrowed. It does not include interest or any other possible amounts that might be added to the total due, depending on when the money is paid off. The interest rate on the loan (if interest is being charged) will also be on the promissory note. The interest rate is agreed upon and signing the note is acknowledgement that it is accepted by the borrower. Names of both parties are added to the note. Parties are the people involved in the loan. There are two types of promissory notes. The first is one with a maturity date. The maturity date is the date that the loan expires and action can be taken by the lender if not paid in full. The second is an on demand note. This note does not include a maturity date but the loan can be called in at any time. If the lender calls the note and the borrower does not pay the money back, the lender can take further action. The borrower's rights should be prominently posted on the promissory note. It should include what actions will be taken if the borrower defaults on the loan. This could include repossession of a vehicle, foreclosure on a property or a lien on a paycheck. It is the borrower's responsibility to understand his or her rights before signing the agreement.
Is a promissory note legally binding?
There is no legal requirement that a promissory note be witnessed in order to be legally enforceable. In most cases, a written agreement is usually a written confirmation of a verbal agreement. Even without a witness to the promissory there, there many ways to prove the validity of the note such as handwriting analysis and evidence of the payment of the borrowed money such as a cancelled check.
A debit or credit memo describing entries in the company's bank account may be enclosed with the bank statement An example of a credit memo is?
a promissory note left for collection
Can a promissory note be negotiable?
It is when it is like a contract for a mortgage or car loan, and may be transferred unless you have it in writing that it is NOT transferrable. For personal loans, etc. , make sure it is notarized or you may end up in court.
Is a promissory notes negotiable instrument?
When endorsed (alt. spelling "indorsed"), a promissory note is a negotiable instrument. This is how banks fund mortgages--the promissory note is endorsed to them, making it a negotiable instrument (i.e., a check) which they then list as a deposit in their books. Concurrently, they provide a "funding check" to the seller or seller's agent. In this way, the bank's books are brought into balance. A promissory note is generally thought of as a glorified IOU--which it more or less is--but a lesser known fact (by the general public) is that when endorsed, it becomes a negotiable instrument, i.e. a check or bill of exchange. All over the Internet, there are good discussions on the implications of mortgage promissory notes and whether or not the situation described above is fraudulent. An interesting discussion above...which may or may no be exactly correct. To the original question: Not all promissory notes are or can be negotiable instruments. ANY P-Note may have the term added that it is NOT negotiable, by agreement of the parties at origination or some point thereafter. this isvery, very common with these instruments when used in family, closely held corporation, etc situations. Or, also common, an instrument may just have who it can be negotiated by restricted...like to members of a club or group...also common. While an open endorsement makes an instrument freely negotiable by the next person to put their name on it...a restricted endorsement (like endorsing acheck with the terms "for deposit to the account of ABC Co only", restricts it to that. (That is why you will see that as he common endorsement on the stamp that most businesses use...even if the endorsed check is stolen or "mis-routed", it is useless to anyone else.)
Does a promissory note need to be notarized?
No, a promissory note does not need to be notarized to be enforceable in a court of law. Virtually every promissory note on a mortgage is not notarized although a lender might require a borrower to have someone else at least witness it. A promissory note is nothing more than a formal contract to repay a loan on certain terms and conditions. In other words, it is nothing more than a fancy I. O. U. Contracts are not required to be notarized to be effective. The benefit of having a contract notarized is that it proves that the person who signed the note is in fact the person it is being enforced against.As an aside, mortgages (as opposed to the mortgage note) must be "acknowledged" in front of a notary, but that is generally a requirement for the mortgage to be recorded publicly rather than to have it be effective.No, it does not.
