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  1. #1

    Default Security Agreement

    My question involves a Security Agreement in the state of NC:

    When I purchased my business, the Security Agreement has a section called..."Remedies on Default".

    Well, I am 24 months late on a 50K NOTE and the holder is calling the Note. I have told him that I will pay him in full once my cash is available after I pay some of the other 100K plus debt down some.

    The remedies state:
    -take possession of collateral
    -selling the collateral
    -take over the business
    -etc.

    If he sues me then can I simply tell the judge I would like to work within the Remedies on Default portion of the Security Agreement and simply give him back the collateral. It is only worth about 10K...far shy of 50K though.

    Can I simply follow the REMEDIES ON DEFAULT portion instead of letting him sue me for the 50K I owe him??

  2. #2
    Join Date
    Sep 2005
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    Default Re: Security Agreement

    I can't read the contract from here, but I very much doubt that it would allow you to escape a $50K debt by turning over $10K in collateral.

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