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I hope this message finds you well. Your question was as follows:
What is the procedure for filing the confessed judgment note if the borrower defaults?
Some judges handle confessed judgment clauses differently than others (some even allow the defendant to challenge the nature of the default). However, as a general rule, once the note is on file with a court having proper jurisdiction over the matter, the collect and potentially have a lien placed, it is as simple as filing a notice of default with proof of default with the same court in which the note was originally filed. You may also want to draft a draft order for the judge to sign based on the default and the confessed judgment portion of the note.
That said, if the person defaults, it is advisable to notify them of the default via certified letter with a return receipt. This is and will be good evidence to show the court relative to the default and your good faith effort to solve the problem without the court's intervention. Give the person a reasonable amount of time to make the necessary and required payment (10 business days is reasonable). Tell them that you will seek legal judgment against them if they have not paid the requested amount in that time. Wait until that time has passed and file your petition for judgment with the court.
Let me know if you have any other questions or concerns.
Best wishes going forward.
I thought the confessed judgement avoided the involvement of judge. The wording in the note he will sign states he was agreeing to a judgement that would involve placing a lien on his property. That is what I wnat to accomplish. The individual has verbally given me that agreement.
Now, assuming default, what do I need other than the confessed judgement note to get court approval to place a lien on the property. And, do I request that, or must I rely on the court to take that action. At the court house today there wasn't any form to state the balance owned on the loan-- Is there a standard format or is a letter stating the amount of the default enough. Does it have to be signed by the debtor?
Thank you for your help. I am very satisfied.
Timothy A follow up question from our session the other day regarding a confessed judgement note. That confessed judgement note is not accomplishing what I am looking for. I just lent an individual $3000 to buy a car. He does not have the money to repay me monthly; however, he owns a home and has equity in it. I want to enter into an agreement with him to repay the money from proceeds of a sale or refinancing of his home. He will agree to this. Can this be done with a simple sales contract that can be recorded in land records so the money is disbursed to me directly when mortgages are paid off. Drew
Thanks, I am not concerned about 2nd or 3rd position. I am only concerned about the procedure for filing the lien. I must need more than the note. Is there a form, or format for requesting a lien?
I am going out in 10-15 minutes. I will sign back on later in the evening.
I apologize for the late response. I have been away from electronics since Friday. There is no technical form that is either published by the state or the courts for this type of agreement. There are, however, on-line legal resources, such as uslegalforms.com, which will have fillable formatted contracts for your state which will help accomplish the task at hand. Most of these forms are in the neighborhood of $25.00, dependent upon complexity.
Once again, once the contract is signed, you will need to file it with the court. You also need to file it with his mortgage holder as well. This will give them notice of the lien on the property. In so doing, it is advisable that you reference the mortgage by name and address as well as his account number within the contract.
Let me know if you need anything else.