Texas Notice of Default (Loan / Secured Transaction / Lease)

TEXAS NOTICE OF DEFAULT AND INTENT TO ENFORCE REMEDIES

SENT VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED
[AND, for Tex. Prop. Code § 51.002 notice: POSTED AT COUNTY COURTHOUSE AND FILED WITH COUNTY CLERK]

1. HEADER

Date: [__/__/____]

TO (Debtor / Obligor):
[________________________________]
[Address of record per loan documents]
[________________________________]
[________________________________], Texas [__________]

Additional Recipients (Tex. Bus. & Com. Code § 9.611(c)):

• Any secondary obligor: [________________________________]
• Any other person from whom the secured party has received, more than 10 days before the date of the notification, an authenticated notification of a claim of an interest in the collateral: [________________________________]
• Any other secured party or lienholder who, 10 days before notification, held a security interest in the collateral perfected by filing: [________________________________]

FROM (Secured Party / Lender):
[________________________________]
c/o [________________________________]
[________________________________], Texas [__________]

RE: NOTICE OF DEFAULT AND OPPORTUNITY TO CURE – [LOAN / SECURITY AGREEMENT / LEASE] dated [__/__/____]

2. THE OBLIGATION

Reference is made to that certain [Promissory Note / Loan Agreement / Security Agreement / Equipment Lease] dated [__/__/____] (collectively, the "Loan Documents") executed by [DEBTOR] in favor of [SECURED PARTY], in the original principal amount of $[____________], secured by [describe collateral or real property, including recording information if real estate: instrument filed [__/__/____] in the Official Public Records of [____________] County, Texas, as Document No. [____________]] (the "Collateral").

Current Outstanding Balance:

• Unpaid Principal: $[____________]
• Accrued Interest through [__/__/____]: $[____________]
• Late Charges: $[____________]
• Default Rate Interest (per § [__]): $[____________]
• Costs, Fees, Expenses (including attorney's fees): $[____________]
• TOTAL INDEBTEDNESS: $[____________]

Per diem interest continues to accrue at $[____________] per day under the default rate.

3. EVENTS OF DEFAULT

[DEBTOR] is in default under the Loan Documents in one or more of the following respects:

3.1 Payment Default. Failure to make scheduled payments due on [__/__/____], [__/__/____], and [__/__/____], totaling $[____________].

3.2 Covenant Defaults. [Specify: failure to maintain insurance required by § [__]; failure to deliver financial statements; failure to maintain financial covenants; unauthorized transfer; failure to pay ad valorem property taxes; etc.]

3.3 Cross-Defaults. Default under [related agreement].

3.4 Bankruptcy / Insolvency Event. [If applicable].

Each of the foregoing constitutes an "Event of Default" under Section [____] of the Loan Documents.

4. DEMAND AND OPPORTUNITY TO CURE

[SECURED PARTY] hereby DEMANDS that [DEBTOR] cure the Events of Default described in Section 3 on or before [__/__/____] (the "Cure Deadline"), which is [____] days from the date of this Notice.

Cure requires:

☐ Payment of $[____________] in past-due amounts plus late charges;
☐ Reinstatement of insurance with [SECURED PARTY] named as loss payee/additional insured;
☐ Delivery of [________________________________];
☐ Payment of [SECURED PARTY]'s attorney's fees and costs incurred to date of $[____________];
☐ Other: [________________________________].

Payment must be delivered to [SECURED PARTY] in cash equivalent (cashier's check or wire transfer) at the address set forth above, or via wire transfer to:
Bank: [________________________________]
ABA: [____________]
Account: [________________________________]

5. ACCELERATION

Pursuant to Section [____] of the Loan Documents and Texas law, [SECURED PARTY] hereby ACCELERATES all amounts owing under the Loan Documents. The entire unpaid Indebtedness is immediately due and payable. [If a pre-acceleration notice is required: This notice serves as formal notice of intent to accelerate; if the default is not cured by the Cure Deadline, [SECURED PARTY] will, without further notice, accelerate the maturity of the Loan in accordance with Holy Cross Church of God in Christ v. Wolf, 44 S.W.3d 562 (Tex. 2001), which requires both (i) notice of intent to accelerate and (ii) notice of acceleration.]

6. REMEDIES [SECURED PARTY] INTENDS TO PURSUE IF DEFAULT IS NOT CURED

6.1 UCC Article 9 Disposition (Personal Property Collateral).
Under Tex. Bus. & Com. Code §§ 9.609, 9.610, 9.611, [SECURED PARTY] may:

• Take possession of the Collateral without judicial process if it can be done without breach of the peace (§ 9.609);
• Dispose of the Collateral by public or private sale in a commercially reasonable manner (§ 9.610);
• Provide reasonable authenticated notification of disposition not less than 10 days before the earliest time of disposition (§ 9.611, § 9.612);
• Apply proceeds per § 9.615 and seek a deficiency judgment against [DEBTOR] under § 9.615(d).

If Collateral is consumer goods, additional protections apply under § 9.620 (acceptance in satisfaction).

6.2 Texas Non-Judicial Foreclosure (Real Property Collateral).
If Collateral includes Texas real property, [SECURED PARTY] will conduct a non-judicial foreclosure sale under Tex. Prop. Code § 51.002, including:

• At least 21 days' written notice of sale by certified mail to the debtor at the last known address;
• Posting of notice at the county courthouse of each county where the property is located;
• Filing of the notice with the county clerk;
• Sale on the first Tuesday of the month between 10:00 a.m. and 4:00 p.m. at the designated area of the county courthouse;
• Sale to the highest bidder for cash.

[DEBTOR] retains the right of reinstatement under § 51.002(d) during the 20-day cure period after service of the statutorily required notice of default on a residential homestead.

6.3 Equipment Lease Remedies (UCC Article 2A).
If the Loan Documents constitute an equipment lease, [SECURED PARTY] may exercise the remedies set forth in Tex. Bus. & Com. Code § 2A.523, including cancellation, repossession (§ 2A.525), disposition (§ 2A.527), and recovery of the present value of rent plus incidental damages (§ 2A.528, § 2A.529).

6.4 Judicial Collection Actions.
[SECURED PARTY] reserves all rights to file suit in [____________] County, Texas seeking judgment for the Indebtedness, pre- and post-judgment interest (Tex. Fin. Code Ch. 304), and reasonable attorney's fees under Tex. Civ. Prac. & Rem. Code § 38.001.

6.5 Receiver.
[SECURED PARTY] may apply for appointment of a receiver under Tex. Civ. Prac. & Rem. Code § 64.001 and § 64.051 to take possession of and preserve the Collateral and collect rents/proceeds.

6.6 Possession of Leased Premises.
If applicable, forcible entry and detainer action under Tex. Prop. Code Ch. 24.

7. FAIR DEBT COLLECTION DISCLOSURES

[If applicable to consumer debt:] This communication is from a debt collector for purposes of the Texas Debt Collection Act, Tex. Fin. Code Ch. 392, and the federal Fair Debt Collection Practices Act. This is an attempt to collect a debt; any information obtained will be used for that purpose. [DEBTOR] may dispute the validity of the debt by writing to [SECURED PARTY] within 30 days of receiving this notice.

8. LITIGATION HOLD; RESERVATION OF RIGHTS

[DEBTOR] is hereby placed on litigation hold with respect to all Collateral, Loan Documents, financial records, and communications. [SECURED PARTY] reserves all rights, remedies, claims, and defenses at law, in equity, and under the Loan Documents, none of which are waived by issuance of this Notice or by any forbearance.

9. SIGNATURE

[SECURED PARTY NAME]

By: _______________________________________
Name: [________________________________]
Title: [________________________________]

cc: [ATTORNEY NAME], Texas State Bar No. [____________]

Sources and References

• Tex. Bus. & Com. Code Ch. 9, subpt. F (Default) – https://statutes.capitol.texas.gov/Docs/BC/htm/BC.9.htm
• Tex. Bus. & Com. Code § 9.611 – Notice of disposition
• Tex. Prop. Code § 51.002 – Non-judicial foreclosure – https://statutes.capitol.texas.gov/Docs/PR/htm/PR.51.htm
• Tex. Bus. & Com. Code § 2A.523 – UCC Article 2A lease remedies
• Tex. Fin. Code Ch. 392 – Texas Debt Collection Act
• Holy Cross Church of God in Christ v. Wolf, 44 S.W.3d 562 (Tex. 2001) (acceleration notice)
• Shumway v. Horizon Credit Corp., 801 S.W.2d 890 (Tex. 1991) (notice of acceleration)