Borrowing, Lending, and Collections FAQ
What are Borrowing, Lending, and Collections forms?
Although the three individual topics sound too big for one form – or even a combination of forms – to address, this is not only possible but for many people a necessary part of doing business. There is no single “Borrowing, Lending, and Collections” form that will address all issues that the title might suggest, but there are a number of legal forms that fall under the “Borrowing, Lending, and Collections” umbrella, ranging from Letters of Credit to Promissory Notes.
The key to understanding Borrowing, Lending, and Collections issues as they relate to using common legal forms it to understand many of the individual forms and how they’re best used. It’s also to remember that these tools are often a necessary aspect of borrowing and lending if you want all of your agreements to receive the full protection of the law.
What are some common Borrowing, Lending, and Collections forms?
The quickest way to understand common Borrowing, Lending, and Collections legal issues is to take a look at the forms that fall under this umbrella and examine what kind of protections they offer to the differing parties. Here are a few examples:
- Promissory Notes: Don’t let the “Notes” part throw you. These are actually very common and very legally-binding forms that especially aid borrowers and lenders by verifying the fact that a debt exists and then explicitly laying out the method through which the debt will be paid. (This is as opposed to the popular “IOU” which is merely an acknowledgement that debt exists.)
- Notices: Ranging from the Notice of Dishonored Check to the ever-popular (for borrowers, at least) Notice of Final Payment of Account, notices are an integral part of the borrowing and lending journey and can handle both expected payments and unexpected hiccups along the way. Many notices also play a prominent role in the ever-unpopular Collection process.
- Letter of Credit: Establishing a credit line with a specific amount, this form is not necessarily as common as many loan and borrowing forms but can still be very useful from both perspectives if a credit line needs to be drawn for some specific purpose.
Of course, to really do all Borrowing, Lending, and Collections forms justice, it’s important to get into the details of each form – as well as acknowledge the dozens upon dozens of other relevant forms that exist. If you have a question about a specific form, be sure to refer to the information displayed on its relevant page.
How do I know which form to use for my purposes?
This is the million-dollar question for whoever is new to the world of Borrowing, Lending, and Collections. However, without knowing your individual and specific circumstances, a clear answer can’t be offered.
If you don’t have a specific idea in mind, it might simply be best to download Borrowing, Lending, and Collections combination packages in order to ensure that the contracts and forms you will need are available to you. From there, you will be able to examine the individual contents of each form in order to see how each might best apply to your specific situation.
What about postponements, extensions and the like?
Of course, not every loan or payment plan will go off without a hitch. That’s why Borrowing, Lending, and Collections packages will typically also include forms that allow for postponements and extensions. Again, these forms do not have a one-size-fits all approach; instead, you’ll have to find the one that is relevant to your situation.
For example, a loan extension agreement might work best for a large loan if you can get your lender to agree to its terms. Meanwhile, a Release of Interest in Security might apply to a different situation altogether.
What if I don’t need to download a full Borrowing, Lending, and Collections package?
You may not have to; you may be looking for specific forms tailored to your specific needs. If this is the case, you shouldn’t feel restrained at all – instead, find the individual form you’re looking to download and feel free to download it. It is worth noting, however, that downloading a combination package can often be a cheaper way of ensuring that you have all of the proper Borrowing, Lending, and Collections paperwork you may need in the future. No one can know your paperwork needs except you.
I’m a lender, and someone hasn’t been paying me in a long time. How do I start the collections process?
The best way to go about it from the perspective of someone new to the idea of collections is to download a combination package of all the forms and notices you’ll need along with a step-by-step guide to the collections process. However, it’s worth mentioning a few key steps to familiarize you with what you’ll likely be facing. First, you’ll want to make sure that you keep your borrower in the know with all the proper notices as soon as a payment becomes late. Continue to follow through with these notices until you have the authority (under the original loan agreement) to turn the situation over to collections; however, it will still be required that you keep the borrower “in the know,” so make sure you continue to issue the correct notices.
This is a very elementary overview of the collections process, so be sure that you are aware of all of the steps necessary before you begin.
As a borrower, what kind of forms should I be wary about signing?
Because borrowing a lot of money can be an intense process, you should technically be “wary” about anything you sign during the process. Be sure to read through each form with a scrupulous eye; you’ll also want to know what kind of forms you’ll be expected to sign before you even begin the process so that nothing catches you off-guard. The more you keep yourself educated about your state’s laws, specifically, the better equipped you’ll be to handle any contracts headed your way.