Recent Answers to Loans Law Questions

I recently entered into a loan agreement with a lender, where I borrowed a significant amount of money and agreed to repay it over a specified period of time. However, due to unforeseen circumstances, I am now unable to continue making the payments on the note payable. I have found another individual who is willing to take over the repayment of the loan, but I am unsure if I can transfer the note payable to this person without obtaining the lender's consent. I would like to know if it is legally permissible to transfer a note payable to another party without the lender's consent, and if not, what options are available to me in this situation?

Damien B.

Answered Dec 14, 2024

Hello! Most loan agreements contain clauses that prohibit the assignment or transfer of the borrower's obligations without the lender's written consent. This is because the lender approved the loan based on your financial status and creditworthiness, and transferring the loan would introduce a new party with potentially different credit risks. If the agreement does not allow for an assignment and If the lender does not consent to a transfer, one possibility is that you could enter into a private agreement with the individual where they make the payments on your behalf. However, you would remain liable to the lender if they default. If you have a follow-up question or would like a consultation or further legal services, you can let me know. There should be a button on your page or app that allows you to request a proposal from me specifically for the legal service you request. Best regards, Attorney Damien B.

I am in the process of purchasing a commercial property from an individual seller. We have already agreed on the terms of the purchase and signed a Purchase and Sale Agreement. Recently, I have been informed that the seller is in default of their loan agreement with their lender, which could potentially put our agreement in jeopardy. I am seeking legal counsel to understand my rights and the potential implications of the default.

Myrna L.

Answered Sep 20, 2023

Potential loan default on the property may or may not impact your Purchase Agreement depending on when you plan to close escrow. First, isn’t the loan being paid off with the sales price? If so, Second, escrow company should have contacted lender requesting pay off amount. Third, lender would stop any pending default action when they know they will be paid off with the sale.

I am a small business owner who recently loaned money to a business associate. The loan was made via a Promissory Note, which I drafted myself. I am now looking to learn more about the key terms and conditions of the note, in order to ensure the safety of my investment. I am hoping to gain a better understanding of the legal implications of the document, and how to protect my interests.

Thomas L.

Answered Jun 30, 2023

1. How much is owed. 2. Interest rate. 3. Repayment schedule. 4. Specific defaults (something specific to the borrower) 5. General defaults - failure to pay, bankruptcy.

I was told by my brother n sister that I would be able to borrow against my parents estate 20,000.00 to buy a trailer and car. This was my dad's wish. A trailer was bought for 13,563.95 and I was told I'd have to wait for car. I have medical issues and have to travel 45 miles either way to see my Drs so a car is very important. My brother executer and sister showed up yesterday saying they never said 20,000. and I'm only getting 15,000. They expected me to sign a promissory dated back in Nov 2020. I've always thought contracts should be signed before the fact not after. The money will be taken from my share of trust so why the note.

Rebecca S.

Answered May 26, 2021

A promissory note is based on when the loan is made, not necessarily when the note is signed. So if the siblings actually loaned the money, regardless of when the note is signed, then a backdated note is ok. Review by an attorney is advised.