Promissory Note Sample for Water Bill

INSTITUTIONAL PROMISSORY NOTE & DEBT REPAYMENT AGREEMENT

Document ID: PN-WB-202X-01
Effective Date: [Effective Date]
Version: 1.0
Governing Jurisdiction: State of [State], County of [County]

---

1. STATUTORY & LEGAL COMPLIANCE NOTICE

NOTICE: This document constitutes a binding legal obligation. This institutional-grade Promissory Note has been structured to memorialize and secure an outstanding consumer or commercial utility debt specifically concerning delinquent water, sewer, and municipal infrastructure services. Legal enforceability of negotiable instruments, maximum allowable interest rates (usury limits), grace periods, and notice requirements vary significantly by state and local municipal code. Counsel strongly advises both parties to review local public utility commission regulations and state statutory caps prior to execution. Neither the drafting counsel nor the platform provides formal legal or financial advice; execution of this instrument affects substantive legal rights.

---

2. PARTIES & RECITALS

THIS PROMISSORY NOTE (the "Note") is entered into as of [Effective Date] (the "Effective Date"), by and between:

MAKER / DEBTOR:
[Client Full Legal Name], having a principal residential/business address at [Principal Address] (hereinafter referred to as the "Maker").

PAYEE / CREDITOR:
[Company Full Legal Name], a [State of Incorporation/Organization] [Corporation/LLC/Municipal Utility District], having its principal place of business at [Company Principal Address] (hereinafter referred to as the "Payee").

RECITALS:

WHEREAS, Maker has incurred past-due financial obligations to Payee for municipal or private utility services, specifically consisting of water supply, wastewater treatment, stormwater management, and associated municipal fees, totaling [Amount in USD] (the "Initial Indebtedness"); and

WHEREAS, Maker desires to restructure and amortize the Initial Indebtedness, and Payee is willing to forbear from immediate shut-off, collection, or legal enforcement actions subject to the terms, covenants, and conditions set forth herein;

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Maker covenants and agrees as follows:

---

3. EXHAUSTIVE OPERATIVE CLAUSES & LEGAL TERMS

Section 1. Principal Sum and Promise to Pay

For value received, Maker unconditionally promises to pay to the order of Payee the principal sum of [Amount in USD] (USD $[Numeric Amount]), together with interest accrued thereon, strictly in accordance with the payment schedule and terms set forth in this Note.

Section 2. Interest Rate and Accrual

1. Stated Rate: The unpaid principal balance of this Note shall bear interest at a fixed rate of [Interest Rate, e.g., 5.0]% per annum (computed on the basis of a 365-day year and the actual number of days elapsed).
2. Default Rate: Upon the occurrence of any Event of Default (as defined herein) and continuing thereafter until all delinquent amounts are cured, the applicable interest rate on the entire remaining principal balance shall immediately increase to the maximum rate permitted by applicable law (the "Default Rate").

Section 3. Repayment Terms & Installment Schedule

1. Amortization: The principal and accrued interest of this Note shall be amortized and payable in equal monthly installments of [Monthly Installment Amount in USD] (USD $[Numeric Installment Amount]).
2. First Payment Due Date: The initial monthly installment shall be due and payable on or before [First Payment Date].
3. Subsequent Payments: Subsequent installments shall be due and payable on the [Day, e.g., 1st] day of each and every consecutive calendar month thereafter until [Maturity Date] (the "Maturity Date"), at which time the entire remaining balance of principal and accrued interest, if any, shall be paid in full.
4. Application of Payments: All payments made under this Note shall be applied first to any late fees, collection costs, or accrued interest, and the remainder shall be applied to the reduction of the principal balance.

Section 4. Prepayment Privilege

Maker shall have the absolute right to prepay the principal amount outstanding under this Note, in whole or in part, at any time without penalty. Any partial prepayment shall not postpone the due date of any subsequent monthly installments unless expressly agreed to in writing by Payee.

Section 5. Late Charges and Default Penalties

If any monthly installment or payment required under this Note is not received by Payee within [Number, e.g., 10] calendar days of its scheduled due date, Maker shall pay to Payee a late charge of [Late Fee Amount, e.g., $25.00 or 5% of the overdue installment] to defray administrative collection expenses. This late charge shall be assessed immediately and independently of any default remedies.

Section 6. Events of Default

The occurrence of any one or more of the following events shall constitute an "Event of Default" under this Note:

1. Failure to Pay: Maker fails to pay any monthly installment, late fee, or other sum due under this Note within [Number, e.g., 15] days of its specific due date.
2. Utility Disconnection / Secondary Default: Maker incurs new utility billing charges with Payee and fails to pay such current utility obligations when due, separate from this repayment Note.
3. Insolvency: Maker files a petition in bankruptcy, is adjudicated bankrupt or insolvent, makes an assignment for the benefit of creditors, or suffers the appointment of a receiver for all or substantially all of Maker's assets.
4. Misrepresentation: Any financial statement, representation, or warranty provided by Maker to Payee in connection with the negotiation of this Note proves to have been materially false or misleading when made.

Section 7. Acceleration of Debt

Upon the occurrence of any Event of Default, and at any time thereafter (unless such Event of Default has been explicitly cured in writing by Payee), Payee may, at its sole option and without further demand, notice, or legal process of any kind (all such notices being hereby expressly waived by Maker), declare the entire unpaid principal balance of this Note, together with all accrued interest and accumulated late charges, immediately due and payable.

Section 8. Collection Costs and Attorney's Fees

If this Note is placed in the hands of an attorney for collection, or if suit is filed hereon, or if proceedings are instituted in bankruptcy, receivership, or other judicial proceedings, Maker promises and agrees to pay all reasonable costs of collection, including, without limitation, reasonable attorney’s fees, court costs, and process server fees incurred by Payee.

Section 9. Waivers by Maker

Maker, and any endorsers, sureties, guarantors, and all other persons liable or to become liable on this Note, severally waive presentment for payment, demand, protest, notice of protest, notice of dishonor, and diligence in collection. Payee may, at its option and without notice, extend the time for payment, renew this Note, or release any party or collateral without in any way modifying, releasing, or discharging the liability of Maker.

Section 10. Governing Law and Jurisdiction

This Note, and all claims or causes of action (whether in contract, tort, or statute) that may be based upon, arise out of, or relate to this Note, shall be governed by, enforced under, and construed in accordance with the internal laws of the State of [State], without regard to its conflict of laws principles. Maker irrevocably and unconditionally submits to the exclusive jurisdiction of the state and federal courts located within [County] County, [State].

Section 11. Severability

If any provision of this Note is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction, such provision shall be modified to the minimum extent necessary to make it valid and enforceable. The remaining provisions of this Note shall remain in full force and effect and shall not be affected, impaired, or invalidated.

Section 12. Entire Agreement and Amendments

This Note constitutes the entire understanding and agreement between Maker and Payee with respect to the subject matter hereof and supersedes all prior negotiations, term sheets, representations, and agreements. No amendment, modification, or waiver of any provision of this Note shall be valid unless executed in writing by both Maker and Payee.

---

4. EXECUTION & FORMAL SIGNATURE BLOCKS

IN WITNESS WHEREOF, Maker has executed this Promissory Note under seal as of the Effective Date first written above.

FOR MAKER ([Client Full Legal Name]):

Signature: _____________________________________
Printed Name: [Client Full Legal Name]
Title: [Maker / Property Owner / Account Holder]
Date: [Date]

---

FOR PAYEE ([Company Full Legal Name]):

Signature: _____________________________________
Printed Name: [Authorized Signatory Name]
Title: [Authorized Representative / Utility Manager]
Company: [Company Full Legal Name]
Date: [Date]

---

5. STEP-BY-STEP EXECUTION & FILING GUIDE

1. Document Review & Customization: Open this document in Microsoft Word or Google Docs. Replace all bracketed text (e.g., [Company Full Legal Name], [Amount in USD]) with verified factual data. Ensure that interest rates do not exceed statutory usury limits applicable to utility or consumer debts in your jurisdiction.
2. Signatory Verification: Verify that the individual executing as "Maker" is the legal account holder, property owner, or has explicit written power of attorney to bind the debtor. Ensure the "Payee" signator possesses corporate authority to execute debt restructuring instruments.
3. Execution Protocol:
   • Wet-Ink Execution: Print two identical original copies. Both Maker and Payee must sign and date in blue ink. Each party retains one original counterpart for their respective institutional records.
   • Digital Execution: Upload the finalized document to an enterprise-grade digital transaction platform (e.g., DocuSign, Adobe Sign) ensuring cryptographic audit trails and compliance with the ESIGN Act and UETA.
4. Record Retention & Accounting Integration: File the executed promissory note within the core billing/accounting system (e.g., enterprise utility billing software) and link the account to automated payment milestones matching Section 3. Retain the fully executed instrument for the applicable statute of limitations period governing written contracts in the state of [State] following full satisfaction of the debt.