Many commercial loans contain what are called default interest provisions. When the borrower defaults, the interest rate on the loan increases from the agreed upon basic rate of say 5% to a much higher default rate of usually 18%. The provisions call for the default rate to apply upon any default by the Borrower under the loan agreement. A default can include a monetary default for failing to make required loan payments or a non-monetary default such as breaches of a promise to maintain a… Continue reading
If you loan money to someone and receive a promissory note (“note”) in return, and the party owing the money on the note does not pay when the note is due, what can you do?
Besides making demand for payment, which is usually a preferred first step, you can bring a lawsuit to enforce the note. Unless you were given a security interest (a “lien”) in some particular property to secure payment, you have no right to collect against particular assets, but you… Continue reading
A restrictive endorsement on a check can be used to limit the use of the check. For example, the most common form of restrictive endorsement is “For Deposit Only,” which limits the ability to cash a check over the counter or endorse the check over to another party. However, restrictive endorsements may also be used to resolve claims of money owed between creditors an debtors.
If a creditor claims you owe money, but you dispute the debt or dispute the amount owed, a… Continue reading