CHATTEL MORTGAGE

CHATTEL MORTGAGE

A transfer of some legal or equitable right in PERSONAL PROPERTY as security for the payment of money or performance of some other act. Chattel mortgages have generally been superseded by other types of SECURED TRANSACTIONS under the UNIFORM COMMERCIAL CODE (UCC), a body of law adopted by the states that governs commercial transactions.

The rights of the lender who gives a chattel mortgage are valid only against others who know or should know of the lender’s security interest in the property. Since the borrower possesses the property, others cannot realize that a chattel mortgage exists without notice. Each state, therefore, has developed a system for recording instruments showing the existence of chattel mortgages for particular items of property; these records are usually located in the county clerk’s office.

If a recording system is in existence a buyer is presumed to know about a mortgage. Once,
therefore, the mortgage is properly recorded, the buyer obtains the debt in addition to the property.

CROSS-REFERENCES
Recording of Land Titles.

Chattel Mortgage

PROMISSORY NOTE

This document is to be used as a guideline only. How Stuff Works does not guarantee that this document is suitable, or legally accurate, for all situations, and is not liable for any deficiencies in the document’s content.

Borrower Information:

Name: Date: Street Address: Date of Birth: City: Area code/Telephone Number: State: Driver’s License Number: Zip: Social Security Number:

Lender Information:

Name: Area code/Telephone number: Street Address: If paying by check, make check payable to: City: Send payments to:State: Zip:

Loan Information:

Loan Amount: Loan Period: Interest Rate: Payment Schedule:

1. Promise to Pay. For value received, _____________________________________________________ (Borrower) promises topay _________________________ (Lender) $ ___________________ and interest at the yearly rate of __________% on the unpaid balance as specified below.

2. Installments.

Borrower will pay __________ payments of $ ________ each at monthly/yearly/ ___________ intervals on the ___________day of the month.

Borrower will pay one lump payment on _____________________________________ date.

Borrower will pay ____________ payments of $ __________ each at monthly/yearly/ ______________ intervals with a final
balloon payment of ___________________ at the end of the loan term on _____________________________ date.

3. Application of Payments. Payments will be applied first to interest and then to principal.

4. Prepayment. Borrower may prepay all or any part of the principal without penalty.

5. Loan Acceleration. If Borrower is more than _________ days late in making any payment, Lender may declare that the entirebalance of unpaid principal is due immediately, together with the interest that has accrued.

6. Security.

- This is an unsecured note.

- Borrower agrees that until the principal and interest owed under this promissory note are paid in full, this note will besecured by a security agreement and Uniform Commercial Code Financing statement giving Lender a security interest in the equipment, fixtures, inventory and accounts receivable of the business known as _________________________________.

- Borrower agrees that until the principal and interest owed under this promissory note are paid in full, this note will be secured by the

- mortgage

- deed of trust covering the real estate commonly known as __________________________________

and more fully described as follows: ___________________________________________________

7. Collection Costs. If Lender prevails in a lawsuit to collect on this note, Borrower will pay Lender’s costs and lawyer’s fees in anamount the court finds to be reasonable.

The undersigned and all other parties to this note, whether as endorsers, guarantors or sureties, agree to remain fully bound until this note shall be fully paid and waive demand, presentment and protest and all notices hereto and further agree to remain bound notwithstanding any extension, modification, waiver, or other indulgence or discharge or release of any obligor hereunder or exchange, substitution, or release of any collateral granted as security for this note. No modification or indulgence by any holder hereof shall be binding unless in writing; and any indulgence on any one occasion shall not be an indulgence for any other or future occasion. Any modification or change in terms, hereunder granted by any holder hereof, shall be valid and binding upon each of the undersigned, notwithstanding the acknowledgement of any of the undersigned, and each of the undersigned does hereby irrevocably grant to each of the others a power of attorney to enter into any such modification on their behalf. The rights of any holder hereof shall be cumulative and not necessarily successive. This note shall take effect as a sealed instrument and shall be construed, governed and enforced in accordance with the laws of the State of _________________________________.
Witnessed:_______________________________________ Date: __________________________
Witnessed:_______________________________________ Date: __________________________
Witnessed:_______________________________________ Date: __________________________
Witnessed:_______________________________________ Date: __________________________