How to Restructure a Promissory Note
Although contracts and promissory notes are binding, they are not forever. With the consent of all involved parties, promissory notes can be restructured to better suit changing circumstances in the market and between individuals. Although you do not need an attorney to change your arrangement, consider using one to protect your interests.
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Instructions
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Contact all parties involves, including sureties and guarantors (accommodating parties and co-signers) to discuss restructuring the original promissory note. Note that all parties must agree to the new terms if the terms materially alter the original agreement. Terms that would materially alter the agreement include payment terms, interest rates, the overall loan amount, and any other term essential to the contract. If you're not sure whether a term goes to the heart of the promissory note, contact an attorney.
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Write up a new agreement, including all of the unchanged and altered terms, noting that the agreement supplants the original agreement or buttresses its terms and conditions. Have all original parties sign the amended agreement, which should be notarized. Attach the amended agreement to the original for recordkeeping purposes or destroy the original agreement and keep only the restructured note.
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Call in an attorney if the other parties are represented by counsel or if no one feels competent to draft the new agreement on his own. Although expensive, a qualified contract attorney can be more than worth his fee by ensuring that the agreement is relatively airtight, averting litigation that could occur if someone without a legal education drafts the agreement.
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