DEMAND FOR ADDITIONAL COLLATERAL
Pursuant to the security agreement entered into between the parties on _____________________, the secured party deems itself insecure, and demands that you provide additional collateral with a value of $____(______________ & ____/100 dollars) no later than _________________________. The repayment of the security agreement may be accelerated if such collateral is not provided by that time.
__________________________ By Secured Party
Demand for Additional Collateral
This review list is provided to inform you about this document in question and assist you in its preparation. This Demand for Additional Collateral can help the creditor improve their security position as well as provide the debtor more time to repay the loan. This can radically improve the probability of improving the collection percentage of the creditor as well. We strongly recommend taking this approach after payment problems have been incurred but prior to other court filings.
1. Make multiple copies. Send one to the debtor by mail, another by fax, and keep copies in the related files of the creditor.
2. In any settlement and/or court dealings in the future, this good faith step will be held in favor of the creditor for trying to act in good faith and be reasonable. Similarly it can be used by the debtor to avoid extra damage awards (in states such as Massachusetts that provide them, on occasion, under statutes such as their 93A clause) by their good intent by providing the collateral additions. However, notwithstanding that, this is definitely a document that best serves the purposes of the creditor.
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