How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask dylatess Your Own Question
dylatess, Attorney
Category: Legal
Satisfied Customers: 5156
Experience:  37 plus years representing clients with their legal issues
Type Your Legal Question Here...
dylatess is online now
A new question is answered every 9 seconds

We are sellers of a property...We entered into an installment

This answer was rated:

We are seller's of a property...We entered into an installment sales w/ the buyer. So many years at a certain payment w/ a certain interest rate w/ a ballon payoff. After 3 years now, he has become deliquent with his scheduled payment the last 3 months. He is sending almost 2-3 months of payments...$1500 payment.
QUESTION IS: for accounting purposes, how do I treat this payment? Can we recoup the interest owed since the last payment (3 months ago)? Do I go back and apply the payment towards interest and any fremaining payment funds go to principle?
Hello and thank you for your question. For over 34 years I have answered questions just like yours. And I look forward to assisting you. You are correct. Since he was delinquent, all payments that are received after the due date go to unpaid interest and the balance goes to the principal. Likewise, if your note includes late fees, that would also be deducted from the payment as well. I also recommend that you send the borrower a breakdown of how his payment was applied.
dylatess and 3 other Legal Specialists are ready to help you