Notice of Private Sale of Collateral

Here is a Sample Notice of Private Sale of Collateral to help you prepare yours.

When a bank or credit/loan company wants to sell the pledged collateral due to debt not being paid off by the customer or client. They are legally required to announce the sale and notify the client about the sale. This is an important and essential notice and the banks are required to send it by the government laws. With this notice, if the debtor wants to own his property back. He can pay his debt before due date or he has to agree with the bank to sell the collateral.

Importance of the Notice of Private Sale of Collateral:

Before we describe the importance of notice of private sale of collateral. It is important that we first describe what collateral is and what is mean by private sale of collateral. In simple words, when an individual or a company gets mortgage loan from a bank. They are required to pledge some property with the bank as insurance of loan. This property is known as the collateral and if the debtor doesn’t pay the loan back to the bank. The bank has the legal right to sell the collateral either publicly or private to collect the debt. When a bank makes deal with a single party to sell the collateral. It is known as the private sale of collateral and when the collateral is auctioned publicly, it’s public sale of collateral.

Governments in each country and state around the world give a last chance to the debtor to pay his debt off to the bank or Loan Company before the authorities can sell the collateral. In order to give him this last chance, banks send this notice of private sale of collateral to the client. This way, if the client decides to pay off the debt, the bank can save a lot of trouble and can collect the debt in lesser time. Also, it is possible that even after selling the collateral. The bank can’t collect the full amount of debt so it gives an opportunity to the debtor to pay off his debt and own the pledged property once again.

Useful Tips for Writing the Notice of Private Sale of Collateral:

When you want to write this notice of private sale of collateral to a client, there are many things that you need to take care. The first tip for writing this notice is that you need to give the client suitable deadline or time to pay the debt. It can be anywhere in between 7 days to 1 month or more. Secondly, you need to inform him about the money that the bank will collect after the sale so that if there is still some debt. The debtor can arrange for that money. You are not obligated to mention the name of the buyer for the collateral to the debtor by any law. So there is no need to include that in the notice.

Here is preview of a Free Fillable Notice of Private Sale of Collateral to assist you in drafting your own notice letter,

 

Notice Private Sale Collateral

 

Here is download link for this Notice of Private Sale of Collateral in PDF Form,

Download Notice of Private Sale of Collateral

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