Business Law

fussilet

Active Member
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Q.

I have 2 promissory notes (loans) with a CA start up company. One loan has expired with no payment, the other is coming due. Neither loan has been paid on per the monthly schedule. How can I call in these notes or foreclose on them?


-- Anonymous

A.

Promissory notes do not expire -- they become due and payable. You do not say what the terms are, but if one has "expired," the assumption is that it is all due and payable. If so, you can certainly file a lawsuit to collect on the note. As for foreclosing, though, it depends on what security (or collateral) you had on the note, if any. If it was not secured by collateral, you have an unsecured note. You could get a judgment against the company, and then try to levy upon the company's assets. But if it is a corporation or an LLC, and under the circumstances you describe, there may not be much to collect against. Hopefully, you have a personal guarantee from one or more of the owners. This is an extremely abbreviated summary of a creditor's rights. You should go see an attorney about this immediately.


-- Thomas Pedreira
 

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