Legal Question in Credit and Debt Law in California
unsecured promissory note
I borrowed money from a friend and gave him a promissory note and deed of trust. The deed of trust was never recorded as my friend felt that was excessive. I have not paid anything against the note and it has been eight years. My friend was okay with that and I said I would pay him back if the property ever sold....which it didn't. He has since died. Can his heirs come after me for the money?
2 Answers from Attorneys
Re: unsecured promissory note
Yes.
Re: unsecured promissory note
It depends. If the last payment under the note has come due within the last 4 years, then yes. If the last payment was due more than 4 years ago, then you may be protected by the statute of limitations.
The verbal agreement to pay when the property is sold is a trickier issue. If the heirs know about the agreement and can prove you made it, you may have a problem. At any rate, such a claim would have to be made in a probate action. Given the risks involved and the way a probate action is set up, I would say it would be unlikely that the heirs would insist on pursuing such a claim; it would delay the probate distribution and take money away from the estate to fund the civil lawsuit. But there would be no way of knowing for sure what the heirs are going to do.
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