Legal Options for a lender with a deadbeat payee

[Jeff Deville]

I'm curious what options I have legally for this situation:

I lent money for the purchase of a property. That loan was secured by a note only (yeah, I know. But this was my first deal and I didn't know then). The intention was that this was a bridge loan until the borrower could get a mortgage to pay it back. That's happened now, finally, but they weren't able to get the mortgage for the full amount owed. It always takes forever to get a response from he and his lawyer.  We know they've got the mortgage, so we should be able to get the bulk of our money back, but we want to know what we can do to maximally secure the rest of the investment, now that a new agreement is required anyway.

The plan was to get a new note and a mortgage on the property for the remaining balance. However, now this would be a 2nd position mortgage. Whats more, the courts in NY state have been awful in terms of being excruciatingly slow as well. 

Does anyone have any suggestions on what we should negotiate for that would allow us to collect what's owed immediately, but also put us in the best conceivable position to get the rest of our money back without another extremely long, costly court battle. 

Our next court date is Thursday morning, so I'm trying to be as prepared as possible before then.

[Matthew Kreitzer]

You may want to consult with an attorney more experienced with the intricacies of collections work and bankruptcy. I have my reservations about whether this is even dischargeable in bankruptcy based on the facts presented. Either way, this is a highly complex area of law that should be discussed only with a competent, locally licensed attorney with familiarity in collections and bankruptcy.