If loaning money, always require a promissory note of the borrower. (See "Promissory Notes," elsewhere). Some exceptions may be made, of course, where the amount is quite small, among very intimate friends. Ordinarily, however, always take a note; and if the amount is considerable, or the responsibility of the borrower in the least doubtful, have the payment of the note secured by a mortgage on property worth several times the amount loaned. (See " Mortgages" elsewhere). When difficulty is experienced in collecting an account, get the same, if possible, converted into a note, as it is much easier to handle and collect.

Be very certain, when loaning money on real estate, that the amount of security is not only sufficient to pay the note, but that it is free from encumbrance. If a loan is made taking personal property as security, covered by chattel mortgage, see that no other mortgage has been placed on the same property before.

If the loan is secured by mortgage on real estate, which is much the safest, an Abstract of Title should be required of the borrower, signed by the county clerk or other responsible person, showing that the property mortgaged is entirely free from encumbrance. Or, if there be encumbrance already upon the same, ascertain what its amount may be. See also that your mortgage, taken as security, is recorded immediately.

We have thus enumerated some of the means with which loss by credit may be avoided; but should credits be given, and the parties owing neglect or refuse to pay, the following suggestions, it is hoped, may aid in the collection of the debt.

Preliminary Proceedings

Of course the first steps to be taken in the collection of a debt will depend upon circumstances. The party owing may have met with a sudden reverse of fortune - may be willing, but unable, without great sacrifice, to pay at present; and thus a variety of circumstances will tend to determine the action to be pursued in the commencement - whether it be sharp, positive and energetic, or mild and lenient.

We will suppose, however, that the debtor neglects or refuses to pay a just debt. It becomes necessary, therefore, to proceed to its collection by the various discreet and legal steps at command. These are:

First, To write a letter calling attention to the account unpaid, stating the time when the obligation was due, and accompanying the same with a bill of goods bought, when, etc.

Second, Another letter, a little more pointed than the first, urging the necessity of immediate settlement.

Third, To sue for the same before a competent legal officer.

First Efforts At Collection

The necessary forms will be very similar to the following:


Mr. A. B. Cushman, Elyria, O., Feb. 10, 1877.

Oberlin, O. Dear Sir : Please find enclosed a statement of your account to January first, at which time we had hoped to have settled with all our customers. Early attention to this will greatly oblige,

Yours Respectfully,



Mr. A. B. Cushman, Elyria, O., Feb. 20, 1877.

Oberlin, O. Dear Sir: We are compelled to place some of our accounts in the hands of collectors for settlement; but our relations with you have always been so pleasant, we wish to avoid doing so in your case. As all uncollected bills go into the hands of the collector next Monday, you will please call upon us before then, and oblige,

Yours Respectfully,