Promossory Loan Default

Asked about 5 years ago - California

Loaned 100k to a private party with a deadline to repay in one year. Borrower defaulted and only payed 69k. Letter of Default sent by my lawyer. How do I proceed through the Superior Court in California? My legal plan does not cover the cost of procecution. Can this individual be sent to jail ? Has a history of doing this to two other individual with a total of 330k taken from 3 homes. Assets and collateral put up were not viable options, did not disclose that the collateral equity had already been tapped and it was worthless.

Attorney answers (2)

  1. Raffy Mikaelian Boulgourjian

    Contributor Level 9

    Answered . If you want to enforce your note and collect on it you will have to file suit and get a judgment first. The only person who can send him to jail is the District Attorney. If this debtor has a pattern of abuse against you and others, I think you should report him to the DA. If he has assets, he is collectible, if not, your judgment will stay on his record as a lien if you record it w/ the county recorder and collect interest at the legal rate of 10% here in CA.

    My office does such work for several L.A based credit unions, I would be happy to assist you.

  2. Pamela Koslyn

    Contributor Level 20

    Answered . Breach of a promissory note is a civil matter, not a criminal one, so as pointed out in the other response, unless this party has a pattern of fraud that you could involve law enforcement in, it's just a civil matter for money.

    If your Note provides for interest, late fees, penalties, legal fees, etc., you can add those to your claim. You'd also have a claim for for because he induced you to lend this money by misrepresenting the status of his ty assets, and you wouldn't have lent the money if he hadn't done that. Fraud is a tort and allows you to claim punitive damages.

    As for the practical issue of collecting a judgment, as pointed out, if he's judgment proof because of no assets, you could sue him for breach and fraud, get a judgment against him and then try to collect by garnishing his wages if he has a salaried job, or attaching his bank accounts or recording the judgment in the county he's in, which would attach to any real estate he owns and you'd be paid when he refi's or sells. As noted by the other response, you do get to add 10% interest from the date of judgment, which is a great rate, especially nowadays, if you ever collect it.

    Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.

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