What is the connection between business disputes and defaulting on promissory notes and what should you do next? If you default on a promissory note, you may have legal obligations. A promissory note is a legally binding agreement. If you default on a promissory note, this can lead to serious consequences, particularly if the note included an acceleration clause.
When a borrower defaults on a promissory note in which an acceleration clause was present, the full amount of the loan can be called due regardless of the initial term of the repayment. If the borrower defaults on a promissory note by failing to make an on-time payment, the holder of the note could file an action to collect the total balance as well as any interest due. In Arizona, the lender can also recover its attorneys’ fees and costs in collecting on the note.
The Value of an Attorney’s Insight
Whether you are the borrower or the lender, you should work with an attorney who can help you draft the promissory note. If a business dispute emerges as a result of a default on a promissory note, you should engage with an attorney as soon as possible. These situations can become very complex and frustrating as well as stressful for both parties. Where possible, the party who has been wronged may need to take the issue to court in order to attempt resolution. While in an ideal world, you would be able to resolve disputes before litigation, this is not always the case in reality.
An Arizona commercial litigation attorney can explain to you the rights and responsibilities you retain through a promissory note, so you will have a better expectation of what to do next.
If, as a business owner, you have made a loan to someone else with a promissory note that includes an acceleration clause, you may need to consult with an Arizona business attorney as soon as possible to talk about how to handle this situation so that you can be repaid promptly. Our Mesa, Arizona commercial and business litigation attorneys can advise borrowers of their rights when they have been unable to stay current on loans and promissory notes, and can assist lenders in enforcing their rights to payment.
This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice regardingThe Connection Between Business Disputes and Defaulting On Promissory Notes, or any other litigation matters, please feel free to contact Roger C. Decker at 480.461.5343, log on to udallshumway.com, or contact an attorney in your area. Udall Shumway PLC is located in Mesa, Arizona and is a full service law firm. We assist Individuals, families, businesses, schools and municipalities in Mesa and the Phoenix/East Valley.