Promissory Note Sample for Medical Bill

PROMISSORY NOTE: MEDICAL DEBT OBLIGATION

DOCUMENT ID: MED-PN-202X-001
EFFECTIVE DATE: [Date]
VERSION: 1.0
GOVERNING JURISDICTION: State of [State]

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1. LEGAL DISCLAIMER

This Promissory Note is intended for use as a template for the settlement of medical debt. The enforceability of this document is subject to state-specific healthcare regulations, including but not limited to the Fair Debt Collection Practices Act (FDCPA), state-level consumer protection statutes, and the Truth in Lending Act (TILA), where applicable. The parties are strongly advised to seek independent legal counsel to ensure compliance with local statutes regarding interest rate caps (usury laws) and medical billing transparency requirements.

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2. PARTIES AND RECITALS

This Promissory Note (“Note”) is made and entered into as of the Effective Date by and between:

CREDITOR: [Medical Facility/Practice Name], a [State of Incorporation] [Entity Type, e.g., LLC], located at [Principal Business Address] (“Creditor”).

DEBTOR: [Client Full Legal Name], residing at [Client Principal Address] (“Debtor”).

RECITALS: Debtor acknowledges an outstanding financial obligation to Creditor in the amount of [Amount in USD] (“Principal Amount”) arising from medical services rendered on or about [Date of Service]. Debtor desires to satisfy said obligation through this installment arrangement.

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3. OPERATIVE PROVISIONS

3.1 Promise to Pay

For value received, Debtor promises to pay to the order of Creditor the Principal Amount of [Amount in USD], plus interest at a rate of [Percentage]% per annum, calculated on a simple interest basis.

3.2 Payment Schedule

The Principal Amount and accrued interest shall be repaid in [Number] consecutive monthly installments of [Amount in USD], commencing on [Date] and continuing on the same day of each subsequent month until the total obligation is satisfied. Payments shall be delivered to [Payment Address/Portal URL].

3.3 Prepayment

Debtor reserves the right to prepay the outstanding balance, in whole or in part, at any time without penalty. Any partial prepayments shall be applied first to accrued interest and then to the reduction of the Principal Amount.

3.4 Default and Acceleration

Failure to remit payment within [Number, e.g., 10] days of the scheduled due date shall constitute an "Event of Default." Upon an Event of Default, and following a [Number]-day written cure period, the entire remaining balance of the Note shall, at the option of the Creditor, become immediately due and payable without further notice.

3.5 Late Fees

In the event of a late payment, a late charge of [Percentage]% of the overdue amount or [Amount in USD] (whichever is less) shall be assessed to cover administrative costs, subject to applicable state law.

3.6 Governing Law and Venue

This Note shall be governed by and construed in accordance with the laws of the State of [State]. Any legal action arising under this Note shall be instituted exclusively in the courts of [County] County, [State].

3.7 Attorney’s Fees

In the event that this Note is placed in the hands of an attorney for collection, or if it is collected through any legal proceeding, the Debtor agrees to pay all reasonable attorney's fees and court costs incurred by the Creditor, to the extent permitted by law.

3.8 Entire Agreement

This Note constitutes the final, complete, and exclusive statement of the agreement between the parties with respect to the subject matter hereof and supersedes all prior written or oral understandings. This Note may not be amended except in a written instrument signed by both parties.

3.9 Severability

If any provision of this Note is held to be invalid or unenforceable, such provision shall be severed, and the remaining provisions shall continue in full force and effect.

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4. EXECUTION AND SIGNATURE BLOCKS

FOR [CREDITOR / MEDICAL FACILITY NAME]:
Signature: _____________________________________
Printed Name: [Authorized Signatory Name]
Title: [Title / Role]
Company: [Company Legal Name]
Date: [Date]

FOR [DEBTOR / CLIENT NAME]:
Signature: _____________________________________
Printed Name: [Authorized Signatory Name]
Title: N/A (Individual)
Date: [Date]

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5. STEP-BY-STEP EXECUTION AND FILING GUIDE

1. Drafting: Replace all bracketed text [...] with specific, verified data. Do not leave any bracketed fields empty.
2. Verification: Confirm that the interest rate stated complies with the maximum legal interest rate for consumer contracts in the governing state.
3. Digital Execution: Upload the finalized document to a reputable e-signature platform (e.g., DocuSign, Adobe Sign, or HelloSign). Ensure the "Audit Trail" feature is enabled to capture IP addresses and timestamps.
4. Distribution: Provide one fully executed electronic copy to the Debtor immediately upon signing.
5. Retention: Retain the original executed PDF in a secure, HIPAA-compliant document management system. If this debt is part of a larger medical file, index the Note according to your organization’s internal record retention policy (typically 7–10 years post-payment).
6. Notarization: While not strictly required for a basic Promissory Note in many jurisdictions, having the document notarized adds an evidentiary layer of identity verification, which is recommended for large balances.