Full question:
I financed a car for a friend of mine three years ago; there's two years left on the balance. I need to obtain a form(s) that he could sign, showing he will promise to make the monthly payments - and if he defaults, I have the ability to either sue him or at least show that he was liable for the remaining balance. What type of form would I need? Should I get a promissory note drafted, showing there would be a loss of collateral if he did not pay or Should I have something drafted called a recourse Note? Could You guide me in the right direction? Do these forms have to be notarized after both parties sign?
- Category: Automobiles
- Date:
- State: Pennsylvania
Answer:
You have a few options for securing your friend's payment obligation. You can use an unsecured promissory note, which is simply a promise to pay without collateral. Alternatively, a secured promissory note can be created, where the car serves as collateral. This means if your friend fails to make payments, you can repossess the car.
It's important to consider whether you hold the original title, as this prevents your friend from using it to secure another loan. Consulting an attorney in your area is advisable to ensure you choose the best option for your situation.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.