What the documents say about default
The note, the loan agreement, and any guaranty define what counts as a default, whether notice and a chance to cure are required, and when the lender may accelerate the full balance. Disputes often arise over how payments were applied, whether a covenant breach rather than a missed payment triggered the default, and whether informal extensions or accepted late payments changed the terms. A personal guaranty can expose an owner even when the borrower is a company, and guaranties often waive defenses the borrower might raise. Loans between friends, relatives, or business partners frequently lack clear written terms, and the dispute may start with whether the money was a loan at all.
Fast-track procedures and defenses
New York has a procedure that lets a creditor suing on a promissory note or a guaranty for a fixed sum seek judgment by motion, skipping much of the usual pleading stage, so a borrower may need to respond quickly and with evidence. Defenses depend on the facts; common ones involve payments that were not credited or a lender's agreement to modify the terms. Usury limits can also matter, though they apply differently to individuals and to businesses. Some commercial financing, such as merchant cash advances, is structured to avoid being treated as a loan, and courts look at the substance of the arrangement rather than its label. Collateral adds another layer, since a secured lender may pursue the collateral as well as a lawsuit.
Negotiating or litigating
Many loan repayment disputes end in a forbearance agreement, a restructured payment schedule, or a settlement, but those documents often add new waivers and acknowledgments, so they should be reviewed before signing. Lenders should confirm that their notices were properly given and that the claimed balance is documented. At the outset we review the loan documents, the payment history, correspondence, and any default or acceleration notice, and we weigh the timing pressures on each side. If a lawsuit has already been served, bring it right away, because the time to respond is limited.
