Situations I see
- A business partner or investor borrowed money for the company and stopped paying
- A seller financed the sale of a business and the buyer defaulted on the note
- A friend or family member borrowed a large sum with a promise to repay
- A private real estate loan, secured or not, went into default
- A guarantor signed for a loan and now claims they're not responsible
When there's a signed note
A promissory note is among the strongest documents a creditor can have. If the note is signed, the amount is clear and the payments stopped, there's often little to dispute, and these cases can frequently be resolved on summary judgment. Most notes also provide for interest at a stated rate, late charges and the lender's attorney's fees on default, all of which are generally enforceable.
If the note has an acceleration clause, a missed payment can make the entire balance due at once. If it's secured by a mortgage or a security interest, there may be collateral to look to as well.
When there's no note
Many loans between people who know each other are made on a handshake. That doesn't make them unenforceable. An oral promise to repay money is generally enforceable in Massachusetts, but you'll need to prove the money was a loan and not a gift or an investment. Evidence that helps:
- Bank records showing the transfer
- Texts or emails mentioning the loan, repayment or a payment schedule
- Any partial payments the borrower made
- Memo lines on checks, Venmo or Zelle notes
- People the borrower told about the loan
Personal guaranties
When a company borrows and an owner signs a personal guaranty, the owner's personal assets are on the line. Guarantors often argue that the terms changed without their consent or that they didn't understand what they signed. A well-drafted guaranty usually defeats those arguments, but the specific language matters.
Timing. The limitations period for most contract claims is six years from the breach. For a note payable in installments, each missed payment can start its own clock, and acceleration can change the analysis. Notes signed under seal can carry a twenty-year period. Don't assume an old loan is too old until someone has looked at it.
Fees
Note cases with clear documents and a borrower who has assets are often a good fit for a contingency fee, and many notes let the lender recover attorney's fees from the borrower. How fees work.
Send me the note or whatever records you have, and a short history of the loan and payments. Request a case review or call (617) 230-2779.