Debt Collection Blog

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The Benefits of Mortgages and Promissory Notes

When a debtor won’t pay up, you’ve got to get creative. Creativity comes in the form of a knowledgeable debt collection attorney who knows the ins and outs of commercial debt litigation and every avenue to collect your money. Among the many tools in the arsenal, there are mortgages and promissory notes. A mortgage is a “security instrument” and a promissory note is a “debt instrument” or a document establishing the obligation to pay. The two go hand in hand, and without a promissory note, a mortgage is worthless.

Here’s why they work…

  • Gives the debtor the option to substitute a mortgage for a Mechanic’s Lien. This exchange is beneficial to the creditor as the lien goes from statutory to consensual, which is more favorable in terms of bankruptcy laws and forces the debtor to subordinate its homestead rights.


  • Provides collateral as protection against Homestead loop holes. The Massachusetts Homestead Protection Act protects up to $500,000 of the homeowner’s equity from creditors. However, there is a Bankruptcy Code that preempts preexisting debt exclusion. This allows the debtor to file a homestead after purchasing product from a creditor, then file bankruptcy and still receive the benefit of a homestead.


  • Acts as a valuable tool in Pre-Sale Preparation and provides an added layer of protection on credit applications, especially when extending significant amounts of credit.


  • Limits your liability and increases your customer’s.


  • Often times, it not only secures principal payment but also interest on the debt and attorney’s fees and other costs.


When you need an aggressive debt collection litigation attorney, call the offices of Alan M. Cohen. Put our 30-plus years of experience against any debtor, and you will start collecting soon! For more information, please call 508-620-6900 or email us at

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