Default Letter

Summary

This default letter template is for use by a secured creditor to send to its borrower, informing the borrower that it has defaulted on its loan obligations. This template includes practical guidance and drafting notes This is a form of default letter to be sent by a secured creditor to the borrower, informing the borrower that it has defaulted on its loan obligations. Before beginning to prepare the actual letter, all the relevant loan documents must be reviewed to determine how to reference them in the letter and how to proceed, including to determine who should receive the letter and in what manner, i.e., by mail, fax, courier or otherwise). This template should be adapted to specify the defaults that have occurred, what remedies may be exercised, and other actions that the secured creditor will take, as well as to fill in the other information in the blanks and the brackets. The letter should not include any reference to actions that will be taken unless the secured creditor absolutely will take such action. For related content, see Representing Secured and Unsecured Creditors and Borrower Default and Lender Next Steps. For additional resources, see Loan Agreement Events of Default: Lenders' Remedies Resource Kit and Out-of-Court Restructuring and Liquidation Alternatives Resource Kit.