Idaho Promissory Note Templates

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An Idaho promissory note is a written agreement between a lender and borrower. When a borrower signs a promissory note, he or she agrees and promises to repay a loan. The agreement outlines the terms of the loan, which include the amount of the loan and the period of time in which the loan should be paid in full. There are two types of promissory notes in Idaho: secured and unsecured.

Idaho Secured Promissory Note

A secured promissory note grants the lender the right to collect property. Therefore, if the borrower defaults on the loan or stops making payments on it, the lender will be reimbursed.

Idaho Unsecured Promissory Note

An unsecured promissory note doesn’t include security, which adds greater risk to the lender when completing the transaction. This means that the lender doesn’t have the right to collect collateral if the borrower defaults.

If a lender decides to issue an unsecured promissory note, he or she should ensure the borrower is a trustworthy individual. Fortunately, creating a promissory note Idaho form is simple. You can make a free Idaho promissory note on your own.

For most transactions, a promissory note template for Idaho should be sufficient.

Frequently Asked Questions

In Idaho, the statute of limitations for promissory notes is five years. Therefore, after five years, a lender may have difficulty suing to recover the money lent to the defaulting borrower.

However, a promissory note can become invalid before it expires. For example, if it was altered or wasn’t correctly written, then the contract becomes null and void and therefore, unenforceable.

How to enforce a promissory note in Idaho will depend on the type of document it is. To enforce a secured promissory note, a lender can repossess a secured asset through their own efforts or hire a lawyer to perform this task on their behalf.

Enforcing an unsecured promissory note in Idaho requires more effort. A lender must file a petition with the court and hopefully, get a judgment in their favor. If that fails, a lender can sell the debt to a collection agency.

In Idaho, the borrower records a promissory note by debiting the cash account and crediting the notes payable account.

For any income a lender generates from a promissory note, it must be reported to the IRS. The amount of taxes paid on the promissory note depends on the interest rate on the loan.

There are a few ways you can collect from a promissory note in Idaho.

  • Politely ask the borrower for repayment. If he or she is cooperative, give them time to come up with a payment. If that fails, send a past due notice.
  • Use a debt settlement agreement to range the terms of the loan. This gives the borrower a chance to make good on the loan by changing the amount owed or the amount of time the borrower has to pay the lender.
  • Contact a debt collector. Contact a professional to collect on the payments.

Depending on the terms of the purchase agreement, either the buyer or seller is responsible for paying documentary stamp taxes on promissory notes for mortgages.