Indiana Promissory Note Templates

An Indiana promissory note is a written promise to pay a sum of money to a lender at a particular time in the future. The borrower, lender, and sometimes a co-signer are involved in the signing of a promissory note. A promissory note in Indiana can be secured or unsecured.

Indiana Secured Promissory Note

When a borrower signs a secured promissory note, they agree to relinquish their property in the event they default on the loan. Therefore, if the borrower fails to pay, the lender can seize the property to obtain reimbursement for the loan. The property or collateral that secures the note can be either real estate or personal property. A promissory note Indiana form is a commonly available document and is simple to fill out.

Indiana Unsecured Promissory Note

An unsecured promissory note doesn’t include any property securing the payment. Therefore, it can be more difficult to enforce an unsecured promissory note. If a borrower fails to pay back the loan, the lender can file a lawsuit and hope that the borrower has assets that can be seized to satisfy the loan.

You can use an unsecured promissory note template for Indiana and fill in the details yourself. A free Indiana promissory note is all that’s necessary to record the transaction.

Frequently Asked Questions

Promissory notes in Indiana have a limitation period of six years. After reaching this time period, they are almost impossible to enforce. Therefore, to ensure the promissory note is completely enforceable, a lender should file a lawsuit within six years of the borrower’s last payment.

If the promissory note is valid, a lender may file a lawsuit against the borrower if he or she has defaulted on the loan.

In Indiana, 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.

In Indiana, a lender can collect from a promissory note as long as they take action within the given six-year limitation period.

A lender can collect from a promissory note using the following methods:

• Using a debt settlement agreement. Lenders can use a debt settlement agreement by altering the loan to more favorable terms.
• Seizing secured property. If the promissory note is secured, the lender can seize the borrower’s property for reimbursement.
• Hiring a collection agency. A collection agency can help mitigate a lender’s losses from a breach of the promissory note.
• Taking legal action. If other options prove ineffective in collecting the debt, lenders can file a petition with the court. If the court rules in their favor, the lender can seek to garnish the borrower’s 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.