Form 5-5

This form assumes that the default is the debtor’s failure to pay an installment when due. Another event of default may exist. If so, it should be stated in the letter. See section 14.27 in this manual for discussion of default.

Letter to Debtor Giving Notice of Default and Intent to Accelerate

[Date]

[Name and address of debtor]

Re:   [description of collateral, note, and security agreement]

[Salutation]

I have been retained as attorney for [name of creditor].

Your obligation to my client as set out in the referenced note and security agreement is in default because of your failure to make payment of $[amount] on [due date] as required by the note and security agreement, a copy of which is enclosed.

The total amount owed is $[amount]. This total amount consists of $[amount], princi­pal; $[amount], interest accrued through [date]; and [itemize other charges].

Demand is now made for payment of the total amount owed. Direct your payments to this office.

Additional interest or other charges may accrue on this debt. To obtain a current payoff figure, call [telephone number] between [time] and [time], except for weekends or holidays.

Please forward payment of the full amount that is due and unpaid under the terms of the agreement to my office immediately. This letter constitutes notice that, unless I receive a cer­tified check, cashier’s check, or money order for the full amount that is due and unpaid on or before [number] days after the date of this letter, I intend to take whatever steps are necessary to protect my client’s interests, including seeking late charges, collection expenses, attorney’s fees, interest, and acceleration of the remaining unpaid principal balance under the terms of the referenced note and security agreement and the laws of this state.

Enclosed is an addressed, postage-paid envelope for your payment.

Sincerely yours,

   
[Name of attorney]

Certified Mail No. [number]

Return Receipt Requested

Enc.

c:   [name of creditor]