It is not always easy to pay off outstanding debts, particularly with creditors and debt collection companies on your neck. However, there is still hope in straightening your credit report by paying off your debts, albeit, through negotiations.
If you are a debtor or a creditor and you have agreed to settle a debt, then it is imperative that you engage a debt settlement lawyer in Salt Lake City to help you document the terms of your settlement. These documents indicate terms of your new contract and other important details as discussed hereunder.
Installment Payment Promissory Notes
Three categories of people majorly use a promissory note. That is, lenders that prefer installment payments from their borrowers, borrowers that sign up to a loan with installments, or people who are in the business of lending money or managing loan companies. This document indicates that the loan will be paid back in consistent and equal installments. Often, it will spell the specific amount to enable both parties budget and plan accordingly. Additionally, interest rates and other loan obligations are agreed upon and well stated in this document.
Promissory Note with Balloon Payments
Also referred to as a balloon promissory note, this document outlines details that surround payment of a loan as one or more large payments at the end of the loan period. Due to the fact that this loan structure secures a borrower a lower interest amount, you need to be sure that you can complete the loan payment when the time comes. You can use this document if your loan includes interest and you want to set up an amortization table, if you want to establish monthly payments, or if you are a party to a loan with the balloon payment arrangement.
Note Payable
This document contains details of the settlement and all the terms and conditions of your loan. It is mostly used in three major situations. These include; you want to formalize your loan agreement in writing, your loan has an interest, and you require an amortization table, or you need to create a promissory note to show the structure and terms of the loan. Note payable highlights details such as the amount payable, the payout schedule, and the interest rate, if there is any, is customarily squared away.
Loan Agreement
Normally, a loan agreement is a legally binding document, which maps out not only the terms of the loan but also protects you in case a borrower defaults your loan. This document is used when you are giving a loan, and you need a signed document, you are borrowing money, and you need to agree that you will pay, or you need a loan amount that requires collateral. This document must contain details such as contact information for the lender and borrower, repayment options, interest rates, late fees, defaulting consequences and collateral, among others. This is the most important document among all loan and debt settlement documents.
Unpaid debts are a nightmare to both debtors and creditors. Establishing a debt settlement strategy is beneficial to both parties. However, it needs to be backed up by legally recognized and binding agreements. Therefore, ensure you get a competent lawyer to help you with the documentation.
