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Roger, Attorney
Category: Family Law
Satisfied Customers: 30897
Experience:  BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
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I have a promissory note owed to my x-wife for 90,000. I was

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I have a promissory note owed to my x-wife for 90,000. I was given one year to pay interest free will I tried to refinance my property. If I could not refi I was to put my house on the market by March 31 2013. I was unable to refi do to my income so I put the house for sale earlier in November of 2012. The house would not sell in the depressed market. Now I found a bank to loan me the 90,000. This is not a refi, it is a home equity loan at 6% variable for 15 years and then is due. This is not a good loan but I was going to go for it to get her paid off. In the MSA it states after the Mar 31 deadline she will start charging me interest. I signed the MSA with a note stating I do not agree to pay interest because this was not a loan. When I sign for the loan she gets the money first due to the promissory. She is charging 10 percent interest which is 1,125. Is this high interest legal? A high yield savings is only 0.15 percent. Thanks Greg.

Kirk Adams : Hi - my name is XXXXX XXXXX I'm a Family Law litigation attorney. Thanks for your question.
Kirk Adams : Under California Civil Code § 3289(b), "if a contract does not stipulate a legal rate of interest, the obligation shall bear interest at a rate of 10 percent per annum."
Kirk Adams : Here's a link to the code section:
Kirk Adams : Thus, because that is the allowed legal rate of interest, then it would not likely be considered too high or unreasonable.
Kirk Adams : However, IF the agreement you signed has the provision about interest scratched through and you specifically removed this provision from the agreement, then you certainly have grounds to claim that you should be assessed no interest on the amount due.
Kirk Adams : If you can't agree on the interest, you would likely have to bring the matter before the judge and have him/her decide the issue.
Customer: Hi Kirk If there is no mention of interest in the promissory note does she have the right to charge me the 10% interest. Thanks Greg.
Kirk Adams : Hi - According to the above statute, IF there is no mention of interest in the contract, the 10% interest rate is the "default" rate of interest.
Kirk Adams : Thus, legally she can charge 10%.
Customer: thanks Kirk.
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