Borrower missed the payment under the promissory note. What does default acceleration look like in Washington?
Promissory note collection is the cleanest of the unpaid-instrument matters. The note is a written, signed instrument with a stated principal, a stated interest rate, a maturity date, and (usually) an acceleration clause. The collection action is generally not a complex breach-of-contract analysis; it is a straightforward action on the note. The two questions that actually decide leverage: was the note properly executed (signed by the borrower in the right capacity, with consideration recited), and what does the acceleration clause require (a notice and cure period, or automatic acceleration on default). Add in any personal guaranty, and the demand letter writes itself.
The note as a written instrument
Article 3 of the UCC (Chapter 62A.3 RCW) governs negotiable instruments in Washington. A promissory note that is signed by the maker, contains an unconditional promise to pay a fixed amount of money, is payable on demand or at a definite time, and is payable to a specific person or to bearer is a negotiable instrument under RCW 62A.3-104. Most promissory notes meet that definition. Notes that recite an obligation to do something other than pay money (deliver goods, perform services) fall outside Article 3 and are treated as ordinary contracts.
Default and acceleration
The acceleration clause is the single most important provision in the note for collection purposes. Three forms recur in Washington notes:
- Automatic acceleration: any default automatically accelerates the entire outstanding balance, due immediately. The demand letter does not have to give notice; it just states that acceleration has occurred and demands the entire balance.
- Optional acceleration on notice: the holder may accelerate by giving written notice. The demand letter is the notice. The form of notice and any minimum number of days must follow the clause exactly; a defective notice does not accelerate.
- Acceleration after notice and cure: the holder must give written notice of default, the borrower has a cure period (often 10 or 30 days), and the holder may accelerate only if the cure period passes without payment. The demand letter doubles as the notice; the deadline for cure must match the clause.
Read the acceleration clause before drafting. A demand letter that demands the full balance under a "notice and cure" note without first giving the cure-period notice undermines the demand and may forfeit the acceleration right for that default cycle.
The guaranty and the security
Many promissory notes are accompanied by a separate personal guaranty (or a guaranty paragraph in the note itself), and many are secured (UCC-1 on personal property, deed of trust on real property). The demand letter should name every guarantor and reference any security interest. Where the note is secured by a UCC-1, the holder has the option to pursue the collateral under Article 9 (Chapter 62A.9A RCW) rather than (or in addition to) suing on the note; the analysis of whether to liquidate collateral first or sue first is fact-specific. Where the note is secured by a deed of trust, the nonjudicial foreclosure under Chapter 61.24 RCW is the standard remedy; the demand letter generally precedes (and triggers) the nonjudicial foreclosure notice.
What the promissory note demand letter should do
- Identify the note (date, parties, principal, interest rate, maturity) and attach a copy.
- State the default with specificity: which payment was missed, what the cure period required, what notice was given.
- Declare acceleration (or notice of intent to accelerate, depending on the clause) and demand the full accelerated balance.
- State per-diem interest at the contractual rate (or RCW 19.52.010 default rate if none is written).
- Cite RCW 4.84.330 if the note has an attorney-fee clause.
- Name every guarantor and demand from the guarantor as well as the maker.
- Reference any security interest (UCC-1, deed of trust) and state whether the holder intends to pursue the collateral.
- Demand payment by a specific date, 10 to 15 business days from the letter (timing matches the cure provision if there is one).
- Send certified mail to the maker, every guarantor, and (for a secured note) every junior lienholder of record.
Documents to upload before the letter goes out
- The original promissory note (or a clean copy if the original is in safekeeping).
- Any personal guaranty in the form executed.
- Security agreement, UCC-1 filing, or deed of trust if the note is secured.
- Payment history showing every payment made and the principal balance.
- The missed-payment record and the date the cure period began (if applicable).
- Any prior notices of default already sent.
- Borrower contact information and registered-agent record if the borrower is an entity.
When this becomes worth hiring an attorney
- Outstanding balance above roughly $5,000 (most note collections justify attorney involvement because the note itself is the proof).
- A personal guaranty, security interest, or both.
- A borrower (or guarantor) with reachable assets.
- An acceleration clause that requires precise notice (cure period, registered mail, specific form), because errors in notice can forfeit the acceleration right.
What I review when you send the file
I read the note first to confirm it meets the Article 3 definition (negotiable instrument vs. ordinary contract makes a difference at trial), then the acceleration clause to design the correct notice, then the guaranty and any security record. I form a view on whether the file supports a single-letter approach or whether a $1,200 demand letter plus draft complaint is the better posture given the dollar amount and the borrower's likely response.
Primary sources
- RCW 62A.3-104: negotiable instrument definition.
- Chapter 62A.3 RCW: Article 3 of the UCC.
- RCW 19.52.010: 12 percent default interest.
- RCW 19.52.020: ceiling on contractual interest.
- RCW 4.84.330: reciprocal attorney-fee statute.
- RCW 4.16.040: six-year statute of limitations on a written instrument.
This page is an educational resource. Sergei Tokmakov is a California attorney (CA Bar #279869) currently seeking admission to the Washington State Bar.