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Richard
Richard, Lawyer
Category: Real Estate Law
Satisfied Customers: 54002
Experience:  32 years of experience as lawyer in Texas. I'm also a Real Estate developer.
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I have a situation and I need some help with. I have a note

Customer Question

I have a situation and I need some help with. I have a note on one of my properties in Gatesville Texas, the deal was a 12 months balloon note and at the end of the note I get cashed out via refinance or the buyer sells her old home and cashes me out with the equity from the sell. Well she sold her property but didn't get nearly as much as she had planned. Now the note has expired and i'm stuck in a bad situation. Attached is the note.
She has offered to put another 8k down and extend the balloon to 4 years in which time the loan would be paid off but that is far from ideal for me. I want he cash now not in 4 years.
My question is what can I do legally in this situation? I don't want to take the property back A. because I don't like the idea of doing that B. it is a headache. But for arguments sake would I be entitled to take the property back because she is in default of the agreement?
I am trying to figure out a way to motivate her to get a traditional loan and use that 8k as a down payment. But as a last resort would I be legally allowed to take the property back?
If you want to speak about this over the phone that is fine if not email works as well. Send me the bill and I will get you paid, thanks.
Submitted: 11 months ago.
Category: Real Estate Law
Expert:  Richard replied 11 months ago.

Good morning. My name is ***** ***** I look forward to helping you.

Just so I'm clear on the facts, do you have a deed of trust giving you a lien on the property to secure the note that you received? Thank you!

Customer: replied 11 months ago.
I do, I own the property outright cash.
Expert:  Richard replied 11 months ago.

Thank you! Even if you have a lien, that does not mean that you have to foreclose on the lien to collect the note. The property just provides you additional security in addition to your buyer being personally obligated. So, you can simply file suit on the default under the note. Filing the suit will give you the collection options and leverage you need to collect the debt owed you. That's because once the suit is filed and a judgment awarded, you become a judgment creditor, and if she doesn’t then pay the judgment, you can have the sheriff serve a summons on her for a debtor examination. That forces her to meet you in court again and answer questions under oath about her assets. After that information is obtained, you have the power to attach bank accounts, have the sheriff seize other personal property, and/or place liens on any non-homestead property he owns to satisfy the judgment. Texas, unfortunately, is one of 4 states that does not allow wage garnishment in this situation, so that would not be an alternative for you. In my experience, simply filing the suit is typically all you need to do to resolve this outside of court because most of the time, once served with a summons she is being sued, your debtor will want to pay the debt rather than defend a suit she's got no chance of winning.

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