Question 1

What is the maximum interest rate for an unsecured note in North Dakota?

Accepted Answer

North Dakota has a 6% (default) usury rate. 6% default rate; maximum 5.5% above Federal Reserve cost of funds rate. Since unsecured notes carry higher risk, lenders often charge rates closer to the maximum, but exceeding the limit can void the interest or trigger penalties.

Question 2

What is the statute of limitations for collecting unsecured debt in North Dakota?

Accepted Answer

In North Dakota, the statute of limitations for debt collection is 6 years (oral and written). After this period expires, the lender can no longer file a lawsuit to collect on the defaulted note. The clock starts when the borrower first defaults on a payment.

Question 3

What is the small claims court limit in North Dakota?

Accepted Answer

The small claims court limit in North Dakota is $15,000. If the amount owed on your unsecured promissory note falls within this limit, small claims court is the fastest and most affordable way to obtain a judgment. No attorney is required.

Question 4

Can wages be garnished for an unsecured note in North Dakota?

Accepted Answer

Up to 25% of disposable earnings. After obtaining a court judgment on a defaulted unsecured promissory note in North Dakota, the lender can request wage garnishment from the borrower's employer, subject to these state-specific limits.

Question 5

Do I need a personal guarantee for an unsecured note in North Dakota?

Accepted Answer

While not legally required, a personal guarantee is strongly recommended when lending to a business entity in North Dakota. Without one, you can only pursue the business's assets if it defaults. With a personal guarantee, you can pursue the guarantor's personal assets including bank accounts, real estate, and other property.

Question 6

Is an unsecured promissory note legally enforceable in North Dakota?

Accepted Answer

Yes, an unsecured promissory note is fully enforceable in North Dakota as long as it meets basic contract requirements: offer, acceptance, consideration (the loan), capacity of both parties, and legality (including compliance with North Dakota's 6% (default) usury limit). The note should be in writing and signed by the borrower.

Question 7

What happens if the borrower files bankruptcy in North Dakota?

Accepted Answer

If a borrower files bankruptcy in North Dakota, unsecured debts (including those from promissory notes) are generally dischargeable, meaning the borrower may not have to repay them. This is the biggest risk of unsecured lending. In a Chapter 7 bankruptcy, unsecured creditors are paid last from any available assets. In Chapter 13, unsecured creditors may receive partial payment through a repayment plan.

Question 8

Can I report a defaulted unsecured note to credit bureaus in North Dakota?

Accepted Answer

Yes, you can report a defaulted unsecured promissory note to credit bureaus (Equifax, Experian, TransUnion) regardless of which state you're in, including North Dakota. You must comply with the Fair Credit Reporting Act (FCRA), which requires accurate reporting and proper dispute handling. Alternatively, you can use a collection agency that will handle the credit reporting.

Aspect	North Dakota Rule
Usury Rate	6% (default)
Statute of Limitations	6 years (oral and written)
Small Claims Limit	$15,000
Garnishment Rules	Up to 25% of disposable earnings

Free North Dakota Unsecured Promissory Note Forms

North Dakota Unsecured Promissory Note Overview

North Dakota Legal Requirements

Important: North Dakota Usury Laws

Collection Remedies in North Dakota

Send a Formal Demand Letter

File in Small Claims Court ($15,000 limit)

File a Civil Lawsuit

Enforce the Judgment

Statute of Limitations in North Dakota

Sample North Dakota Unsecured Promissory Note

STATE OF NORTH DAKOTA

UNSECURED PROMISSORY NOTE

North Dakota Unsecured Promissory Note FAQ

Official North Dakota Resources

North Dakota Department of Financial Institutions

North Dakota Courts

Other North Dakota Promissory Note Types

North Dakota Secured Promissory Note

North Dakota Demand Promissory Note

General Promissory Note

North Dakota Loan Agreement

North Dakota Bill of Sale

Create Your North Dakota Unsecured Promissory Note