Full question:
After sending a promissory note and payment of legal tender, can our credit still be ruined by this?
- Category: Debts and Credit
- Subcategory: Promissory Notes
- Date:
- State: National
Answer:
For a promissory note to be enforceable, it must include the loan amount, payment date, interest rate, and any collateral details. It should be supported by consideration, which can be money, services, or other value, and must be signed by the borrower. The note should also explain the consequences of defaulting on payments.
If a borrower pays off the loan on time, they are not in default. However, if they do default, the creditor has several options for collecting the debt, including sending reminder letters, charging late fees, and contacting collection agencies. Under federal laws, such as The Fair Debt Collection Practices Act, creditors may report negative credit information to credit bureaus, which can affect the borrower's credit score. Generally, accurate negative information can remain on a credit report for seven years.
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.