Legal Question in Credit and Debt Law in California
Unsecured promissory note
Hello,
about five years ago, I sold a property in California. I got paid in cash, and I carried an unsecured note for $350,000. The debtor has been paying interest on the note. The principle balance up to date outstanding balance on the note is $220,000 + interest. I am concerned about the statute of limitations of collecting the debt. The debtor has not paid interest yet for the past three months now and is delinquent. My question is: does the four year statute of limitation start from the time of the promissory note, or from the time the debtor is delinquent. Also, what are my options as to collecting the debt? The debtor has already sold the property I had originally sold to him? Can I put a lein on his house? He also has many investments in other private companies.
I appreciate your repsonse.
2 Answers from Attorneys
Re: Unsecured promissory note
Depending on your documents, if this was a commercial transactions, a pre-judgmnent attachment can be filed once the lawsuit is filed if they are delinquent. If you have any questions, please contact me.
Re: Unsecured promissory note
You should be OK for now as far as the statute of limitations as it was reset with each successive payment. The note should contain an acceleration clause, if so have a lawyer prepare a letter accelerating the debt (in other words, the entire debt is now due) followed by a lawsuit. Good luck, and don't ever again accept that large of an amount as an unsecured debt. Don't even keep more than $100,000 in the bank!
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