Full question:
My daughter who lives in Wyoming is in the process of getting a divorce. I loaned her $7,000.00 to help her 'get on her feet' and $12,000.00 to buy a car. She titled the car in my name using her Wyoming address. Her divorce will soon be final and I want to transfer the Wyoming car title to her showing me as the lien holder at my Texas address along with a promissory note for the $12,000.00 plus a separate promissory note for the $7,000.00 I loaned her 'to get on her feet.' What forms do I need and can they be completed and notarized in Texas or do I need to go to Wyoming to get this done?
- Category: Debts and Credit
- Subcategory: Promissory Notes
- Date:
- State: Texas
Answer:
A promissory note may be secured or unsecured. When it is secured, it means that property, called collateral, may be taken by the lender if the borrower fails to pay the loan payment. If the debtor files bankruptcy, the lender may be able to recover the value of the loan by taking possession of the specified collateral instead of receiving only a portion of the borrowers property after it is divided among all creditors. Collateral may be many different types of property, such as shares of stock of a company, inventory, accounts receivable, etc.
The parties to the loan must sign it and the notary must witness the signatures. The contract may contain a choice of law clause as to where it will be litigated if a dispute arises. Choice of law refers to what jurisdiction's law is to be applied when there is a dispute in a transaction. The loan document may the n be recorded where the property is located.
A promissory note may provide for payments to be made in installments or in a lump sum. The terms may provide for a series of smaller payments at the beginning of the loan period and a larger balloon payment at the end of the loan period. The option for a confessed judgment agreement, also called a cognovit note, may also be included. A confessed judgment agreement requires the debtor not to claim defenses and agree to have a judgment entered against him if he fails to pay and the matter is taken to court. Please see the forms at the links below to determine which best suits your needs.
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.
