I identified the following gaps in your agreements, I shall explain using the first agreement and Promissory note since the two are similar to the second agreement and promissory note:

  1. Loan Term: The loan agreement does not specify the exact term of the loan (e.g., the start and end dates of the loan). It only mentions that the loan is due in 30 days with a one-week grace period. To avoid ambiguity in future, it would be helpful to include the specific loan term in the agreement.
  2. Repayment Schedule: The loan agreement does not mention a specific repayment schedule or how the borrower should make the repayments. It would be beneficial to outline the repayment schedule, such as specifying the date or dates on which the borrower should make the repayments.
  3. Interest Calculation: The agreement states a return of 40%, but it does not specify how the interest is calculated. It would be important to clearly define the interest calculation method, whether it is simple interest or compound interest, and how it is applied to the principal amount.
  4. Grace Period: While the agreement mentions a one-week grace period, it does not provide details on whether any additional charges or penalties would be applicable during this period. Clarifying whether there are any specific terms or penalties associated with the grace period would be helpful.
  5. Penalty Calculation: The agreement mentions a penalty of 20% ($1,000) per month if the loan is not satisfied within the designated time frame. However, it does not clarify how the penalty is calculated or when it starts to accrue. Providing clear information on how the penalty is calculated and when it is applied would avoid confusion.
  6. Foreclosure Option: The agreement states that the lender has the option to foreclose on the property after 90 days of the loan due date if it is not satisfied. However, it does not specify the consequences or any further details regarding the foreclosure process. Including information about the foreclosure procedure, the borrower’s responsibilities, and any associated legal fees would be beneficial.
  7. Disbursement Date: The loan agreement mentions that the funds will be sent on Thursday, February XXXX However, it does not specify how the funds will be sent or the desired method of payment. Providing instructions on the disbursement method and any associated details would be helpful

Promissory note

  1. Repayment Schedule: Does not Specify the repayment schedule or due dates for the loan, including the exact date by which the borrower should repay the principal amount and any accrued interest.
  2. Interest Calculation: Does not Clearly define how the interest is calculated. It should Specify whether it is simple interest or compound interest, and clarify if it is applied to the principal amount only or to the outstanding balance (principal plus accrued interest).
  3. Clarify Penalty Calculation: While the note mentions a 20% per month penalty if the funds are not returned within the agreed timeframe, it would be helpful to provide further details on when the penalty starts accruing and how it is calculated. Specify if it is a flat 20% of the principal or if it is calculated based on the outstanding balance.
  4. Grace Period: Provide more specific information regarding the one-week grace period. Clarify if any additional charges or penalties apply during this period and whether the grace period affects the start of the interest calculation.
  5. Attorney’s Fees: Specify that the borrower (GuyXXX) will be responsible for reasonable costs of collection and attorney’s fees incurred by the lender (Arthur Kelly) in the event of default or the need to pursue legal action to collect the funds.
  6. Default Clause: Include a clause that defines what constitutes default on the loan and the potential consequences of default, such as the lender’s rights to accelerate the loan or pursue legal remedies.


In general, the loan agreement and promissory note should outline the terms and conditions under which the lender has the right to foreclose on the property in the event of default. This may include provisions related to the borrower’s failure to repay the loan within the agreed timeframe or non-compliance with other specified conditions.

The loan agreement and promissory note should ideally contain the following details to support a foreclosure process:

  1. Clearly defined default clause: The agreement should specify what constitutes a default on the loan, such as failure to repay the loan amount or breach of any other terms mentioned in the agreement.
  2. Collateral details: The agreement should identify the collateral securing the loan, including the property address, its description, and any relevant information about its ownership and value.
  3. Consequences of default: The agreement should outline the consequences of default, including the lender’s rights to initiate foreclosure proceedings, the process for notifying the borrower, and any additional fees or penalties that may be applicable.
  4. Legal fees and costs: The agreement should state whether the borrower is responsible for the legal fees and costs incurred by the lender in pursuing foreclosure actions.

Using the Agreements, though they are not drafted to standard, you can foreclose. The process is as follows;

  1. Notice of default: You will need to issues a notice of default to the borrower, informing him of the default on the loan and providing an opportunity to cure the default within a specified period, like 30 days.
  2. Public notice: If the default is not cured within the specified period, you must publish a notice of sale in the county where the property is located. This notice should be published in a newspaper of general circulation for four weeks prior to the foreclosure sale date.
  3. Foreclosure sale: The foreclosure sale is typically conducted at the county courthouse or another designated location. The property is auctioned off to the highest bidder. In Georgia, foreclosures are typically non-judicial, meaning they do not require court involvement unless the borrower challenges the foreclosure in court.
  4. Confirmation of sale: Following the foreclosure sale, the court issues a confirmation of sale if the sale is deemed valid. This confirms the transfer of ownership from the borrower to the winning bidder.
  5. Eviction: If the borrower does not voluntarily vacate the property after the foreclosure sale and confirmation of sale, the new owner (usually the winning bidder at the auction) may need to initiate eviction proceedings to regain possession of the property.

I hope this answers your questions. However, please note the gaps identified in the agreements. Next time, please seek professional services in drafting a good contract. The contracts you have can be easily challenged in court.



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