Promissory notes are financial instruments that provide for one party to pay a certain amount to another party at some time in the future. The time that the payment becomes due may be determined in advance by the agreement of the parties, or it may be subject to the demand of the payee. Businesses often use promissory notes as short-time financing arrangements, such as when a seller allows the buyer of a business to pay in installments. Unfortunately, the buyer may default rather than making the payment as arranged. This may have serious financial consequences for the seller. If you are trying to pursue payment from a party that has defaulted on a promissory note, the New York commercial debt collections lawyers at Klapper & Fass can help you explore your options and vigorously assert your rights.Protecting Your Rights Under a Promissory Note
The author of a promissory note is known as its maker, while the party to whom the payment is due is known as the payee. The note must be in writing and signed by the maker to be enforceable, although it does not need to be signed by the payee. These instruments are negotiable, which means that they can be transferred from the original payee to a third party that takes over the payee’s right to demand payment on the note.
The terms of a promissory note typically include the parties, the principal amount, the rate of any interest that may apply, the date, the manner of repayment, and the maturity date, or when the final payment will become due. Certain promissory notes, which are known as demand promissory notes, provide that payment will become due on the payee’s demand. Very few other provisions tend to appear in promissory notes, and you may wish to consult an attorney when you are negotiating the note if the maker asks to insert additional terms.
If the maker defaults on a note, the payee can seek to collect on it through the courts. This process is facilitated by the fact that you do not need to prove in court why the debtor owed you the money that is the subject of the note when you are trying to enforce it. Under certain circumstances, defenses that the debtor tries to raise cannot be based on the transaction that gave rise to the note. This reduces the scope of the issues that may be litigated if a debtor resists meeting its obligations under the note.
In New York, Article 3 of the New York Uniform Commercial Code provides the rules that govern the enforcement of promissory notes. When you are trying to enforce a note, however, it is advisable to consult a knowledgeable attorney for guidance and representation.Contact a New York Lawyer for a Commercial Debt Collections Matter
At Klapper & Fass, we have the experience and dedication needed to assist creditors with enforcing their rights against recalcitrant debtors in a variety of situations. We can help you devise a course of action that is tailored to your circumstances and make the legal process as smooth as possible. Our New York commercial debt collections attorneys maintain offices in White Plains and Manhattan, from which we serve the five boroughs of New York City as well as Rockland, Suffolk, Westchester, and Nassau Counties. Klapper & Fass also can provide legal representation in many other states throughout the U.S., such as Pennsylvania, Illinois, California, Texas, and Florida. Call us at 914-287-6446 or complete our online form to set up a free consultation with a litigation attorney.