I have a cognovit note for 56K+ from a person I sold 2 properties. He has not been making payments timely and I am interested in place a lien on his home for the amount owed. What is involved in doing this?

Were the properties used as collateral for the note? Is his home one of those properties?

You cannot place a lien against his home for a secured debt that is secured by other collateral. If the note is not secured, then you will need to file suit and obtain a judgment to place a lien.

Yes, the 2 properties were initially used as collateral for the note. His home is not one of the properties. Though the properties were the basis for the note, I agreed to give him clear title for both properties in turn for the cognovit note. So, as it stands now, I have a cognovit note for the amount owing. My main concern is this investor owns upwards of 50 properties. With the economy and the housing/rental market being in the dumper, he may be forced to file bankruptcy at some point. I am looking for a way to better secure my loan. Would securing a lien against his own residence, place me in a more secure situation if he were to file bankruptcy?

The laws on cognovit notes vary by state. Basically the signer has waived his right to a trial and gives you the equivalent of a judgment without the need to file suit.

The problem is a cognovit note is a fairly rare and obscure legal document. Since the laws on them vary, I can't be sure if you can use it to place a lien on personal property. I think you need to consult an attorney familiar with this type of note.

Thank you Scott. Greatly appreciated. TC