Legal Question in Real Estate Law in Hawaii
promissary note and forclosure
If you have a promissory note signed and notorized by both owners of a house that states you are to be paid upon the sale of the property and then the house goes into forclosure, will that note honored?
2 Answers from Attorneys
Re: promissary note and forclosure
If the promissory note is otherwise legally correct it may be honored, however, if there is no Mortgage, the note is not secured and you will have to get a judgment from the court and attach to the property. You will also come in line behind all of the secured creditors, tax authorities, lien holders, etc. In other words, if there are a bunch of other creditors + their attorney's fees in front of you and the debt adds up to more than the property will go for at auction, your promissory note is probably worthless.
Aloha, Jon A. Zahaby
Re: promissary note and forclosure
In general, the debt is still owed and the note proves the existence of the debt. You just don't have the collateral or proceeds from the sale of the house to obtain payment of the note.
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