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If you lend money to someone who defaults on a promissory note and does not repay, you can legally possess any property that individual promised as collateral. If the loan is not secured, the lender may seek legal restitution in court. They may obtain a judgment against the borrower in default.

Promissory notes are legally binding contracts that can hold up in court if the terms of borrowing and repayment are signed and follow applicable laws. Important details to include are: The amount of money borrowed.

If the borrower does not repay you, your legal recourse could include repossessing any collateral the borrower put up against the note, sending the debt to a collection agency, selling the promissory note (so someone else can try to collect it), or filing a lawsuit against the borrower.

Yes, a properly executed promissory note is legally binding. As long as the note contains all necessary elements, is signed by the involved parties, and complies with applicable laws, it's enforceable in court if the borrower defaults or fails to meet their obligations.

Circumstances for release of a promissory note The debt owed on a promissory note either can be paid off, or the noteholder can forgive the debt even if it has not been fully paid. In either case, a release of promissory note needs to be signed by the noteholder.

Evaluate the Promissory Note Factors affecting its value include the remaining balance, interest rate, payment history, and the borrower's creditworthiness. A higher value can be expected from notes with consistent payments and reliable borrowers.

Most legitimate promissory notes can easily be verified by checking the SEC's EDGAR database or calling your state securities regulator .

In California, Mr. Doland is correct that promissory notes are not recorded, but promissory notes which are secured by real property would have a deed of trust recorded, making the loan a matter of public record.