When can you sue over an unsecured promissory note?
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When can you sue over an unsecured promissory note?
I loaned someone $5,000 a year ago, and I have a signed, notarized promissory note. The highlights of the note are: 1) minimum payment $10/month; 2) late payment Fee $10, 3) interest 10%/year, 4) payable on demand after 2 years. For the first 6 months I was not paid at all, then each month thereafter I was paid late, and only after I contacted the debtor about being late. It’s been a year and I want to sue over the note. I want to know if 6 months delinquency and then late payments each month are strong enough grounds to sue. I don’t want to lose because the note isn’t payable on demand yet.
Asked on September 20, 2010 under Bankruptcy Law, Florida
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 14 years ago | Contributor
If, under the terms of the note, you should havve been paid certain amounts and have not received them, you could sue for those amounts--you can sue over any missed payments, and do not need to wait until the full payment is due. However, since you can only sue for what you've missed to date--you can't sue for the full $5,000, since it's not yet payable on demand--it may not be worth it to sue; it seems like, given a $10/mo minimum and a $10 late fee/mo., the most you could sue for after one year, even if you had been paid nothing to date, would be around $240 or so dollars. To sue for the full note, you need to wait until it's payable on demand; you make a demand; and it's not paid.
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