What to Do When a Borrower Won’t Pay You Back in New York

You loaned someone money. They promised to pay you back. And now? They’ve vanished, stopped replying, or keep coming up with reasons they can’t pay you. At least not yet.

It’s frustrating. And honestly, it feels like a slap in the face, especially if you trusted them.

Whether it was a personal loan, a business deal, or a signed promissory note, you’ve done your part. You followed the rules. You gave them time. But now the clock’s run out and your patience has too.

So what do you do when someone owes you money in New York and just doesn’t pay? You’ve got options. Legal ones. Ones that don’t require chasing them down or sending endless reminders. 

Our commercial litigation attorneys at Horn Wright,LLP, walk you through exactly how to handle it step-by-step so you can take back control and stop feeling stuck.

Still Waiting on That Payment? Here’s How to Enforce a Promissory Note in NY

A promissory note is more than just a promise - it’s a legal agreement. And if it’s done right, you can absolutely use it to get your money back. But it has to check a few boxes first.

Let’s break it down:

• It’s gotta be in writing. No screenshots. No “we talked about it.” If there’s no document with the terms laid out, you’re going to have a tough time proving anything in court.
• It has to be signed. Their signature? That’s what turns it from a casual promise into a binding agreement. No signature, no leverage.
• The amount owed should be crystal clear. We’re talking dollars and cents. If it just says “I’ll pay you back eventually,” that won’t fly.
• You need repayment terms. When’s the money due? Is it monthly payments? One big lump sum? Clarity here makes enforcement a lot smoother.

If all that’s in place, you’re already ahead of the game. Now it’s time to enforce it. A business dispute resolution lawyer can help you file a claim, serve notice, and push for a judgment if the borrower keeps ignoring their responsibilities.

Because honestly, you’ve waited long enough.

The Loan Was Secured, Now What Happens to the Collateral?

Here’s the thing: if your loan was backed by collateral, you’ve got more than just promises on your side - you’ve got property. And that changes everything.

Depending on what the borrower offered up, here’s what might be on the table:

• Real estate. If they used their home, a building, or any property to secure the loan, foreclosure might be your path forward. Yes, it’s a process, but it can lead to real recovery.
• Vehicles. Cars, trucks, trailers. If they put it up as collateral and defaulted, you may have the right to repossess it (legally, of course).
• Business equipment. Tools, tech, machinery. Whatever helps them run their business. If it was listed in the loan, you may be able to take it and apply it to what you're owed.
• Inventory.  Think shelves of products or raw materials. If that was part of the deal, and you filed everything properly, you’ve got a path to claim it.
• Investment accounts. This one’s a little more complex, but if the paperwork lines up, financial assets can be fair game too.

But here’s where things get sticky: if you didn’t file a UCC-1 statement, or if there are other creditors involved, you might have to fight for your spot in line. That’s where our commercial debt collection attorneys can help you make sense of it all and move fast while protecting your rights.

Here’s What Trips People Up and How You Can Avoid It

Enforcing a loan can get complicated fast. But most of the time? The biggest problems are totally avoidable. These are the mistakes we see over and over - the ones that can delay your case or knock it off track entirely.

1. The loan terms are too vague. You need more than “we agreed he’d pay me back.” If there’s confusion about amounts, interest, or timelines, it’s harder to prove your case. Details matter. A lot.

2. You didn’t keep your receipts.  Every message. Every deposit. Every time they promised to pay. That paper trail is what keeps your claim alive. No docs? No leverage.

3. You messed up the acceleration clause. If your contract says you can demand full repayment after a missed payment, great. But you’ve got to follow the process. No shortcuts. No informal warnings. Just what the agreement says. Exactly.

4. You waited too long. New York gives you six years to enforce a written loan. That might seem like a lot, but we’ve seen people miss that deadline because they were “trying to work it out.” If that delay caused actual harm to your business? You might also be looking at breach of contract claims.

5. You crossed a legal line. We get it. You’re mad. But if you start threatening the borrower, contacting their family, or getting aggressive, that’s a problem. Debt collection laws are strict and violating them can flip the case against you.

6. You didn’t check if they have anything to collect from. You can’t squeeze water from a stone. Before you sue, look at their assets. Do they have wages? Property? Business revenue? If not, you might be spending money you won’t recover. But if you're already in commercial lawsuit representation, that info is essential.

7. Bankruptcy caught you off guard. When someone files for bankruptcy, your hands are tied for a bit. But that doesn’t mean the debt’s gone. If you're a secured creditor or the loan’s part of a bigger business fallout - a partnership dispute attorney can help you stay in the game.

You Deserve to Be Paid. Let’s Make That Happen.

You gave someone your trust and your money. And now they’ve put you in a tough spot. That’s not okay.

Our commercial litigation lawyers at Horn Wright, LLP, have helped countless lenders across New York recover what’s owed and hold borrowers accountable. Whether it’s a personal loan gone bad or a commercial agreement that’s unraveling, we know how to get results. And we do it with clarity, confidence, and compassion.

Hire one of the best law firms in America and let’s take the next step together. Contact our office today to schedule your FREE, no-obligation consultation.