Illinois Promissory Note Templates

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An Illinois promissory note is a promise by a borrower to repay a loan. It must be signed by both the lender and the borrower. A promissory note outlines the terms of the loan. For example, certain parts of a promissory note may specify the amount of the loan and the period of time in which the loan should be paid in full. A promissory note in Illinois may be secured or unsecured.

Illinois Secured Promissory Note

A secured promissory note allows the lender to secure a piece of the borrower’s property in the event the loan has defaulted. Common types of secured promissory notes include a car loan or mortgage. You need a promissory note Illinois form to denote the transaction.

Illinois Unsecured Promissory Note

An unsecured promissory note doesn’t allow security if the debt is not paid in full. With unsecured promissory notes, the lender usually takes into account the borrower’s credibility without receiving anything in return. An unsecured promissory note template for Illinois can usually meet your needs. You can get a free Illinois promissory note online.

Frequently Asked Questions

In Illinois, a promissory note is valid for 10 years. However, if a new payment or promise to pay has been made within or after 10 years, a lender may still enforce the note.

To enforce a promissory note in Illinois, a lender must file a petition with the court, which sets forth the breach of contract. If the court rules in the lender’s favor, they will be awarded damages, including unpaid balance due, interest, court costs, and attorney fees.

In Illinois, 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.

To collect from a promissory note in Illinois, lenders may take the following actions:

  • Demand full payment of the note.
  • If the promissory note is secured, the lender can place a lien against real property owned by the borrower or have their wages garnished.
  • If the promissory note is unsecured, it can be more difficult for the lender to collect if the borrower defaults on the loan. As a last resort, if all other options are exhausted, the lender can turn the debt over to a collection agency. The collection agency will act aggressively to
  • If the lender fails to reach a payment agreement with the borrower, the lender may take legal action, which, unfortunately, doesn’t guarantee repayment. Hiring a lawyer to navigate the legal aspects of the promissory note should give lenders a better chance of obtaining a judgment in their favor. Winning the case may even allow the lender to garnish the borrower’s future wages.

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.