On Disk Monthly 73/odm73.zip/PROMISS.FF

Text File | 1992-11-02 | 7KB | 170 lines

 $__________________________~(1)
 ____________~(2),__________~(3)
 ______~(4) ______~(5), ____~(5)


                          PROMISSORY NOTE

FOR VALUE RECEIVED, the receipt of which is hereby acknowledged, the
undersigned, jointly and severally, promise to pay to the order of
________________________~(6) the sum of  ____________________~(7),
with interest thereon from date until maturity or default at the
rate of _______________~(8) percent per annum, said principal and
interest to be payable as follows:

________________~(9)

In the event of default in the payment of any installment, or any
part thereof or extension or renewal thereof, when same becomes due,
or upon failure to perform or comply with any of the covenants or
agreements contained herein, the holder of this indebtedness shall
have the option to declare the entire indebtedness to be immediately
due and payable, and the same shall thereafter bear interest at the
rate of __________~(10) percent per annum until paid.  Notice of the
exercise of the option to declare payment due in full is hereby
waived.  No delay in the exercise of said option shall be construed
as a waiver of such right; and said option may be exercised upon any
subsequent default.

The undersigned agrees to indemnify the holder of this note for all
attorneys' fees which are incurred for services actually rendered in
the collection of this note, provided such fee shall not exceed
__________~(11) percent of the principal indebtedness plus accrued
interest.

The makers, endorsers, guarantors, and sureties executing this note
severally waive presentment for payment, notice of nonpayment and
protest, and any and all defenses which they collectively or
individually may have upon the ground of any extension of time of
payment which may be given by the holder of this indebtedness to any
of the undersigned, or to any other person assuming payment thereof.

WITNESSES:

_______________________~(12)       ____________________________~(13)
                                       Maker:


_______________________~(12)       ____________________________~(13)
                                       Maker:


END

NOTES ON PROMISSORY NOTE
Press tab to move to the next field; shift-tab to move to the
previous field.

(1)
PRINCIPAL--Type the amount borrowed here in arabic numerals, for
example, "$1,166.66."

(2)
CITY--City where the loan transaction is taking place.

(3)
STATE--State where the loan transaction is taking place.

(4)
MONTH--Enter the month from which the note is effective.

(5)
DAY:  DATE--Month, Day, Year--should be the date from which the note
is effective.  This will generally be the day that the loan is made.
However, it should be realized that this is the day that interest
begins running on the loan.

(6)
NAME OF CREDITOR--This is the person to whom the money is owed.
This does not have to be for money that changes hands.  In many
situations a note may be used instead of cash when an item is
purchased.  If a sale of an item is involved, consideration should
be given to executing a contract of sale or a Bill of Sale as well
as the note.

(7)
PRINCIPAL AMOUNT OF LOAN--This is the amount of money loaned.
Customarily this amount is spelled out first, then written in arabic
numerals in parentheses, for example:  "One thousand one hundred
sixty-six and 66/100's Dollars ($1,166.66)."

(8)
INTEREST RATE--This is the per annum rate of interest charged for
the loan.  Special care should be taken not to exceed the limits of
interest that can be charged in your state.  These limits are called
usury laws.  Generally, people in private transactions can safely
charge ten percent (10%) to twelve percent (12%), but check your
state's laws if you are not sure.  Charging too much interest in
combination with threats of violence for non-payment is commonly
called "loan sharking." and is a crime.

    While most notes express a per annum rate of interest, few are
paid in even year increments.  Simple interest is therefore figured
by using per diem (or per day) rates.  The per diem is figured by
multiplying the outstanding principal (P) by the per annum interest
rate (I) and dividing by the number of days in the year.  Therefore,
per diem = P * I/365.  A new per diem has to be figured each time a
payment is made that reduces the principal.  Generally, payments are
credited first to outstanding interest due, then to the principal.

(9)
TERMS OF REPAYMENT--Generally, there are two kinds of notes:  1)
Date notes--notes that are due on a specific date, and  2) Demand
notes--notes that are due when requested.  A date note may also be
an installment note or a note that provides for multiple payments
(installments) over a period of time.  Some examples of language
that might be used here are:

30 days after date

    ON DEMAND

    In equal installments of One hundred Dollars ($100.00) per month
beginning on the first day of November, 1992, to be applied first to
interest and then to principal until paid in full.

(10)
INTEREST RATE ON DEFAULT--Many times a creditor may be willing to
give a favorable interest rate to a customer in good standing, but
will need more money to carry the debt if the customer is "slow
pay."  This provision allows for an increase in interest if the
customer is so late as to be in default.  Being in default is a
failure to perform the agreement.  Be aware that this figure will
need to be within the parameters of local usury statutes.

    Note that the preceding sentence allows for the entire debt to
be called due in the event of a default.  This is called an
"acceleration clause."  This provides that a creditor does not have
to wait until the end of a date note to collect the full amount owed
on a note once the debtor has defaulted on his or her obligations.

(11)
ATTORNEYS' FEES--When a note has to be collected by judicial process
(going to court), generally attorneys' fees are incurred.  It is
customary in collection of Promissory Notes to provide that the
Debtor will pay a percentage of the note as attorneys' fees if
collection becomes necessary.  Some attorneys will collect a note
for a percentage.  The amount customarily placed in the note is
twenty-five percent (25%) on smaller notes and ten percent (10%) on
larger notes.  Many courts have the authority to reduce the fee
amount if it would result in an excessive fee.  Consequently, many
notes use the terms "reasonable attorneys' fees" instead of a
percentage and allow the court to set the amount.

(12)
WITNESSES--Your state may not require two witnesses.  However, it
does not hurt to have witnesses to an act, and generally it is
helpful.  The witnesses are people who can testify that the act was
signed in their presence.  In some instances the witnesses might be
called upon to describe the demeanor of the maker to help prove that
the maker appeared to be legally capable of obligation himself for
the debt.

(13)
MAKER--This is the person who owes the debt.  The name of the person
should be printed under the signature line.  If there is more than
one person responsible for the debt, they should sign as makers as
well.