What happens when you fail to make payments as per a promissory note?

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What happens when you fail to make payments as per a promissory note?

My husband borrowed money for his business before we were married. His business failed and he had made some payments to his friend. However, he stopped making payments to her when his business went under. The loan was made to the business and he signed a promissory note. It has been a few years and since then he has lost his home, his job and car. He is not working and I have been helping him with his child support payments which have been reduced. Tomorrow he has to go to court because she file a case against him. Can the courts make him pay even though he has no money?

Asked on September 25, 2011 under Bankruptcy Law, Florida

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

If your husband signed a promissory note in his name for moneys borrowed from this friend and he has failed to repay her under the terms of the promissory note assuming payment is now due and payable, he essentially has breached the terms under the promissory note. His apparent breach of the promissory note is much like the breach of a written contract.

The purpose of the upcoming hearing is to establish liability and damages of the claims against your husband. Assuming he loses the upcoming trial, there will be a judgment entered against him. Once entered, the friend who is now a judgment creditor will then attempt to collect on the judgment awarded regardless of the fact that your husband apparently has no assets to satisfy any award against him.


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