I and my friend lended money to a person in the amount of 25K. We had
a written aggrement of Pledge of Security and Promissory Note, signed
by him. To secure the payment, we created secuirty interest in his
home. The interest rate was fixed amount of 5K due with full principal
payment in 2 months. It's been more than 3 and 1/2 months and we have
not received even a single penny from him. What can we do to get the
money from him?
We have already sent him a written request for the payment also.

Arvind Panwar <arvindpr@hotmail.com> wrote:I and my friend lended money to a person in the amount of 25K. We hada written aggrement of Pledge of Security and Promissory Note, signedby him. To secure the payment, we created secuirty interest in hishome. The interest rate was fixed amount of 5K due with full principalpayment in 2 months. It's been more than 3 and 1/2 months and we havenot received even a single penny from him. What can we do to get themoney from him?

This is for discussion purposes only, and is not legal advice. I'm
not a lawyer. If you want legal advice, hire a lawyer.

You need a real-estate attorney. This is too complicated for
do-it-yourself. As I understand it, you would need to go to the
appropriate county office, *record* that security interest(*). This
should be done quickly, because if he sells the property or borrows
money against it before you record it, you will be out of luck.

(*) Depending on the wording of your "Pledge of Security and
Promissory Note", it might constitute a mortgage or a deed of trust.
If not, you still might be able to record it as a lien against the
property.

Once you have done that, you can start foreclosure proceedings. If
your "security interest" amounts to a mortgage/deed of trust, your
lawyer can help you do that without going to court. If you have a
simple lien, you will probably have to get a court to enforce it.

The foreclosure is a fairly complex process. You will need to give
the debtor notice, and time to "cure" his default on the promissory
note. If he pays you, all is good. If not, you file more papers and
eventually the property will become yours. If it's worth more than
the amount of the loan, you need to pay him the difference. Often the
land's value is determined by a public sale (e.g., by the Sheriff).

Even after the foreclosure is "complete" and the land has been "sold",
he may have up to a year to "redeem" the property by paying off the
loan, so don't start building on it right away.

All of this has to be done just right or your situation becomes worse.
And "just right" is different in every state. Which is why I
recommend hiring an attorney who specializes in this stuff. You
haven't even told us what state this is in.

It would have been even better, of course, if you had had an attorney
draft the "Pledge of Security and Promissory Note". If you did,
consult that attorney for how to proceed now. If you didn't, *find*
an attorney to help get you out of this mess with the least possible
loss to you.
--
I pledge allegiance to the Constitution of the United States of America, and
to the republic which it established, one nation from many peoples, promising
liberty and justice for all.

arvindpr@hotmail.com (Arvind Panwar) wrote in message
news:<b4m4jvgah69jm641jupst2f8gljtq29cbj@4ax.com>... I and my friend lended money to a person in the amount of 25K. We had a written aggrement of Pledge of Security and Promissory Note, signed by him. To secure the payment, we created secuirty interest in his home. The interest rate was fixed amount of 5K due with full principal payment in 2 months. It's been more than 3 and 1/2 months and we have not received even a single penny from him. What can we do to get the money from him? We have already sent him a written request for the payment also.

You can record the note (you should have done this already), which
makes your security interest in the property legitimate, and prevents
him from selling the property out from under you. This is very
important. If you don't, he could sell the property and abscond with
the money. You would have no real recourse against him, and no
recourse at all against the new owner.

You can foreclose on the note or sue for it. Because doing anything
like this takes time and money, it would be wise to be patient: 1-1/2
months past due is not a long time. You'd need a lawyer if you're
serious.

But before you do anything, study your state's usury laws carefully,
because if he raises usury as a counterclaim, you may be in a lot more
trouble than he is. 120% interest ($5K on $25K due in 2 months) would
be usurious just about anywhere.

--
Not a lawyer,

Chris Green

arvindpr@hotmail.com (Arvind Panwar) blurted out
I and my friend lended money to a person in the amount of 25K. We had a written aggrement of Pledge of Security and Promissory Note, signed by him. To secure the payment, we created secuirty interest in his home. The interest rate was fixed amount of 5K due with full principal payment in 2 months. It's been more than 3 and 1/2 months and we have not received even a single penny from him. What can we do to get the money from him?

Depends on what you meant by security. In order to enforce a
security interest without a law suit (and even then it may not work),
you'd have to "perfect" it. For real estate that means having a deed
of trust (or mortgage with power of sale, if either of these is
allowed in your state) that is signed, notarized and then recorded
with the county.

Otherwise it's off to court with you.

Stu

> I and my friend lended money to a person in the amount of 25K.
We had a written aggrement of Pledge of Security and Promissory Note,
signed by him. To secure the payment, we created secuirty interest in
his home. The interest rate was fixed amount of 5K due with full
principal payment in 2 months. It's been more than 3 and 1/2 months and
we have not received even a single penny from him. What can we do to
get the money from him?

Assuming the security interest was properly filed, you can
foreclose on the house. You can also sue him personally for the
debt.

I would suggest speaking with a collection attorney.

--
Brett

************************************************** ***************
* Personal Injury/Malpractice Bankruptcy *
* *
* BRETT WEISS, P.C. *
* Attorneys at Law *
* Maryland, D.C. and Federal Bars *
* lawyer@erols.com *
* http://www.erols.com/lawyer *
* *
* Small Business Estates & Estate Planning *
************************************************** ***************

The Small Print: This response is for discussion purposes only.
It isn't meant to be legal advice and you shouldn't treat it as
such. If you want legal advice, speak with a local lawyer
familiar with your state's laws who can review *all* of the facts
and the law applicable to your situation.
************************************************** ***************

arvindpr@hotmail.com (Arvind Panwar) wrote in message
news:<b4m4jvgah69jm641jupst2f8gljtq29cbj@4ax.com>... I and my friend lended money to a person in the amount of 25K. We had a written aggrement of Pledge of Security and Promissory Note, signed by him. To secure the payment, we created secuirty interest in his home. The interest rate was fixed amount of 5K due with full principal payment in 2 months. It's been more than 3 and 1/2 months and we have not received even a single penny from him. What can we do to get the money from him? We have already sent him a written request for the payment also.

You don't say where you are. Of course, that could make a
difference.

But in general, if someone refuses to pay on a debt, ultimately the
only way to force him to pay is to sue. IF you in fact have a valid
secured interest in some collateral, in some circumstances you can
simply look to the collateral for repayment and do not need to
personally serve the debtor with judicial process. But I have no
idea what you mean by "creating a security interest in his home" and
whether you actually jumped thru all the required hoops in your
jurisdiction to have a valid, recorded interest in his real property.
If you did, and if you did so in a manner that would permit you to
foreclose without his consent, you can start foreclosure proceedings.
If you have no idea what that is or what you do next, HIRE A LAWYER to
advise you and to recover your money.

In USA, it is common for attys who take collection matters to charge a
fee of 10 - 15 percent of the amount collected. Also, if you were
smart enough to put an atty fee clause in your ORIGINAL NOTE, the fee
is ON TOP OF, not taken out from, the principal amount.

However, now that I take another look at your post, you charged this
guy 120 percent annualized rate of interest (your deal was that
interest equal to 20% of the principal would be due in 2 months, or
10% per month) which would be clearly usurious under the laws of most
if not all USA states. IMO no USA court would help you enforce this
contract because of the illegally excessive interest rate, and if you
tried to "enforce" it yourself, you could be guilty of various crimes
including extortion and loan sharking. Now IMO it's even more
important that you have a lawyer review these matters before you do
something really dumb and get yourself in deep trouble.

--
This posting is for discussion purposes, not professional advice.
Anything you post on this Newsgroup is public information.
I am not your lawyer, and you are not my client in any specific legal
matter.
For confidential professional advice, consult a lawyer in a private
communication.

Mike Jacobs
LAW OFFICE OF W. MICHAEL JACOBS
10440 Little Patuxent Pkwy #300
Columbia, MD 21044
(tel) 410-740-5685 (fax) 410-740-4300

Arvind,

You and a friend together lent someone the sum of 25K which was to be
paid back within 3.5 months and at an annual interest rate in excess of 60%.
The loan is unpaid and past due. You ask for advice on collecting the loan.
I think that writing letters demanding repayment is a good first step.
The problem that you need to research is the interest rate of the loan.
Where I live a 60% interest rate is illegal and a court will not help you
to enforce your contract. If that is true where you live then your options
for collection are to continue writing letters and to hope for the best but
plan for the loss of your money.

Good luck,
Dave M.

In article <b4m4jvgah69jm641jupst2f8gljtq29cbj@4ax.com>,
Arvind Panwar <arvindpr@hotmail.com> wrote:I and my friend lended money to a person in the amount of 25K. We hada written aggrement of Pledge of Security and Promissory Note, signedby him. To secure the payment, we created secuirty interest in hishome. The interest rate was fixed amount of 5K due with full principalpayment in 2 months. It's been more than 3 and 1/2 months and we havenot received even a single penny from him. What can we do to get themoney from him?We have already sent him a written request for the payment also.

Legal issues are like real-estate, the thee most important things are:
Location, location, and location.

Which you utterly failed to mention, so anything anybody says, including
me, is 'hypothetical' *at*best*.

I'll assume juristiction _is_ in the United States of America.

You can file a lien against the real-estate, based on the Note.
Assuming he _still_ owns it, that is. If not, you've got _real_ problems.

If you havn't done this already, do it *yesterday*.

This won't get you the money "now", but he won't be able to sell the
property w/o clearing the lien.

As for the note, he _is_ in 'breach', for not having paid. Your recourse
is to go to court, to demand payment. Including a judicial order to
sell the secured property to satisfy the note, if needed.

NOTE: The TWENTY FIVE PERCENT 'interest' for a period of _only_two_months_,
*may* have legal implications -- see the subject of "usury".

On Thu, 07 Aug 2003 09:49:16 -0400, arvindpr@hotmail.com (Arvind
Panwar) wrote:
I and my friend lended money to a person in the amount of 25K. We hada written aggrement of Pledge of Security and Promissory Note, signedby him. To secure the payment, we created secuirty interest in hishome. The interest rate was fixed amount of 5K due with full principalpayment in 2 months. It's been more than 3 and 1/2 months and we havenot received even a single penny from him. What can we do to get themoney from him?We have already sent him a written request for the payment also.

There have been several persons posting in response raising alerts to
the possibility of usury. It should be noted, however, that your
state may except first liens on real property from the effect of the
usury laws. E.g., Or. Rev. Stat. § 80.025(3).

On the other hand, a 120 percent annual interest rate could still
raise questions as to common law unconscionability.

Daniel Reitman

"Christopher Green" <cj.green@worldnet.att.net> wrote in message
news:59r9jv8spp963fvb6drqeomce2vo37ln8b@4ax.com... But before you do anything, study your state's usury laws carefully, because if he raises usury as a counterclaim, you may be in a lot more trouble than he is. 120% interest ($5K on $25K due in 2 months) would be usurious just about anywhere.

Several people answering this post mentioned usury.

Suppose someone on USENET offers me 10% a month on my money. Of course it's
a scam, but suppose I fall for it. If I send the money, am I participating
in usury? Am I adding the risk of criminal prosecution on top of the already
high risk of not getting my money back?

"Christopher Green" <cj.green@worldnet.att.net> wrote in message
news:nsjijvgqu7sk1gc9h6ih64chcotldvpuqi@4ax.com...
You would probably have a defense that you were an innocent investor in the promoter's scheme, because you had no way of knowing that he was intending to commit usury. That may not be enough to get you any of your money back; if the scamster loses it all, to an usury judgment or otherwise, you might as well go whistle for it.

I was getting at something a little different. Does the fact that I send
money to someone in the expectation of getting back 120% interest make ME
guilty of usury? Does it make any difference whether my intention is to get
it from a legitimate borrower or from someone who is himself involved in
questionable practices?

Suppose I lend money to a friend or acquaintance for 120% interest. I
presume that is usury.

But if I lend money to an unknown USENET poster who says I can get 120% on
my investment while being a little vague about how, is that any different?

dreitman@spiritone.com (Daniel R. Reitman) wrote in message
news:<hknfjvc3iqsauettpai7rbi75dfdeh86td@4ax.com>... On Thu, 07 Aug 2003 09:49:16 -0400, arvindpr@hotmail.com (Arvind Panwar) wrote:

I don't agree with most of the responses to this post. i work in the
collections field, and i've been involved with litigation on similar
loans in every state over the last 10 years or so. first of all,
forcing a foreclosure on a property over a civil matter is
theoretically possible, but practically impossible if the property in
question is the debtors primary residence. i can honestly say that in
10 years in the industry, i've never ever seen a debtor lose his/her
house (or forced to sell) based on a judgement, defaulted loan, etc.
the ONLY time i've seen this happen is when the debt in question is
back taxes, and the plaintiff is Uncle Sam. truthfully, even then
it's extremely rare.

the truth is that if i were in the posters shoes, i would avoid paying
an attorney anything at all-- there is a very good chance that the
contract is unenforcable and not legally binding. why take the chance
of being out 25k AND paying big dough to an attorney? just one man's
opinion.




I and my friend lended money to a person in the amount of 25K. We hada written aggrement of Pledge of Security and Promissory Note, signedby him. To secure the payment, we created secuirty interest in hishome. The interest rate was fixed amount of 5K due with full principalpayment in 2 months. It's been more than 3 and 1/2 months and we havenot received even a single penny from him. What can we do to get themoney from him?We have already sent him a written request for the payment also. There have been several persons posting in response raising alerts to the possibility of usury. It should be noted, however, that your state may except first liens on real property from the effect of the usury laws. E.g., Or. Rev. Stat. § 80.025(3). On the other hand, a 120 percent annual interest rate could still raise questions as to common law unconscionability. Daniel Reitman

"D. Zimmerman" <zimmerma@look.ca> wrote in message
news:<dlfnjvgi040qmvljfm2che4daiqlpralf1@4ax.com>...
I was getting at something a little different. Does the fact that I send money to someone in the expectation of getting back 120% interest make ME guilty of usury? Does it make any difference whether my intention is to get it from a legitimate borrower or from someone who is himself involved in questionable practices? Suppose I lend money to a friend or acquaintance for 120% interest. I presume that is usury. But if I lend money to an unknown USENET poster who says I can get 120% on my investment while being a little vague about how, is that any different?

IMO this is apples and oranges. The reason they are seen differently
by the law mainly has to do with the relative power position of the
borrower and lender, and their relative abilty to get credit from
other sources.

To oversimplify a bit, where the borrower is desperately in need of
money, it is usury to demand an excessively high rate of interest
BECAUSE to do so is harmful to the innocent borrower who has no real
alternative because he needs the money. Here the lender, not the
borrower, has the power to set the terms, and if the borrower is
unable to repay, the lender is the one who has the kneecap enforcers
and other extortionate ways of trying to make him pay. In such cases
the law is more likely to see the borrower as the victim and the loan
shark as the criminal.

Where the borrower is a business concern that promises an unusually
high rate of return to investors, the "lender" is instead the little
guy -- an investor looking to make a fast easy buck -- and it's the
borrower (the company that wants to sell him junk bonds) that is
really calling the shots. In that case it's more likely the law's
presumptions will favor the individual investor (lender) because if
things get screwed up, the investor is the one most likely to be the
victim rather than the company that set up the high-risk investment.
That's why securities laws were invented after the high-flying 20's
led to the crash of '29.

In both cases, if the loan turns sour look to where the power to turn
the screws on the other guy really was centered. It lies with the
lender when a loanshark charges an arm and a leg to some poor guy who
just wants to buy bread for his family until next payday and can't get
the money anywhere else, but it lies with the borrower whose business
involves setting up risky investment schemes and then actively
soliciting for investors.

Also look to what happens if things go the way they were _intended_ to
and the high rate-of-return actually gets paid. The loan shark's
customer still is trapped in a high-interest spiral he can't get out
of, just to stay alive. The investors in the high-flying, successful
junk bond investment, however, are just as happy as clams in duck
sauce, and so are the managers who run the company that borrowed their
money and the stockholders who own it -- as long as things are going
well, EVERYBODY profits and is happy. That is never an accurate
description when we are talking about loan-sharking.

--
This posting is for discussion purposes, not professional advice.
Anything you post on this Newsgroup is public information.
I am not your lawyer, and you are not my client in any specific legal
matter.
For confidential professional advice, consult a lawyer in a private
communication.

Mike Jacobs
LAW OFFICE OF W. MICHAEL JACOBS
10440 Little Patuxent Pkwy #300
Columbia, MD 21044
(tel) 410-740-5685 (fax) 410-740-4300

"Stuart O. Bronstein" <stu@lexregia.com> wrote in message
news:0v0tjvoedgds0nr4sh3nlfo6sv499cm7rr@4ax.com... "D. Zimmerman" <zimmerma@look.ca> blurted out
If you are talking about interest rather than investment income, I suspect that the answer is yes. I have not seen a case in which usury has caused the lender to lose its right to principal, however, just interest.

The offers I have seen are often vague as to whether the outrageous return
that is promised is interest, dividend income, or capital gains.

arvindpr@hotmail.com (Arvind Panwar) wrote in message
news:<b4m4jvgah69jm641jupst2f8gljtq29cbj@4ax.com>...
I and my friend lended money to a person in the amount of 25K. We had a written aggrement of Pledge of Security and Promissory Note, signed by him. To secure the payment, we created secuirty interest in his home. The interest rate was fixed amount of 5K due with full principal payment in 2 months. It's been more than 3 and 1/2 months and we have not received even a single penny from him. What can we do to get the money from him? We have already sent him a written request for the payment also.

Several people have raised the spectre of usury. Don't let that keep
you from consulting a lawyer IMMEDIATELY. Even if the rate is
usurious, you are entitled to repayment of the $25K principal under
the terms of the agreement.

The reason you need to see a lawyer RIGHT NOW is to make sure that
your security interest is perfected before someone else acquires a
superior interest in the house. You can sue on the note or foreclose
later; right now you need to make sure that your rights are preserved.