Hi guys, can i ask your advise for a relative of mine.
A neighbor owes a relative some money. Plan is, thru a signed promissory note, neighbor will acknowledge this debt and the terms of the agreed payment(installment payment for a period of time). Other terms in case of failure of payment are:
1) delayed scheduled partial payment shall be ground for legal action
2) the neighbor will give in trust their house as collateral without any demand upon failure of payment
The promissory note is not even notarized, just signed by those in debt. No separate written form is made in regards to using the house as collateral. In the case of failure to pay, how possible that the collateral(house) can actually be used as payment based on the promissory note? Can the promissory note alone be used to force the neighbor to give up their house? Should there be another written 'mortgage' contract?