Mississippi Promissory Note
Mississippi promissory note template with a 6-year statute of limitations and loan-size usury tiers under state law. Free template. Attorney review available.
Introduction
Mississippi has its own confession-of-judgment mechanism most states lack: an "office confession of judgment" under Mississippi Code Sections 11-7-181 through 11-7-185, where a debtor personally acknowledges the debt at the circuit clerk's office and the court enters judgment next term. A note clause can't trigger this by itself; the maker must separately appear and sign later, and the resulting judgment is void as to third parties if tainted by fraud or usury. A promissory note itself is a written, signed promise by one party, the maker, to pay a definite sum to another, the payee, on demand or by a set date. Mississippi's usury rules are a loan-size ladder, not one flat rate: 8% per year by default on a note with no stated rate, the greater of 10% per year or 5% above the Federal Reserve discount rate for a general written note, and no cap at all once an individual borrower's original principal exceeds $2,000. (Mississippi Code Section 75-17-1) A Mississippi note doesn't need to be notarized to be enforceable, and the state runs two separate statutes of limitations, for negotiable and nonnegotiable notes, to the same 6-year figure.
Key Things to Know
- 1
A promissory note is a written, signed promise by one party (the maker) to pay a definite sum of money to another party (the payee), either on demand or by a set date.
- 2
Mississippi's usury rules are a ladder rather than one flat percentage: 8% per year as the default rate on a note with no stated rate, the greater of 10% per year or 5% above the Federal Reserve discount rate for a general written note, a higher tier (the greater of 15% per year or 5% above the discount rate) for a written loan over $2,500 involving certain business entities, and no percentage cap at all once an individual borrower's original principal exceeds $2,000, at which point usury cannot be raised as a claim or defense. (Mississippi Code Section 75-17-1)
- 3
A Mississippi promissory note does not need to be notarized or witnessed to be enforceable. Mississippi Code Section 75-3-104 lists what makes a note a valid negotiable instrument (an unconditional promise, a fixed amount, a signature, payable on demand or by a definite date), and notarization isn't one of the requirements.
- 4
Mississippi has its own named procedure, an "office confession of judgment," under Mississippi Code Sections 11-7-181 through 11-7-185: a debtor personally signs a statement acknowledging the debt at the circuit clerk's office, and the court enters judgment at its next term. A clause written into a note does not trigger this by itself, since the debtor has to separately appear and sign later; a judgment entered this way is void as to third parties if tainted by fraud or usury.
- 5
Mississippi runs two separate statutes of limitations to the same numbers, depending on whether the note qualifies as a negotiable instrument: 6 years from the due date, an accelerated due date, or an actual demand made on a demand note, under Mississippi Code Section 75-3-118 for a negotiable note or Section 15-1-81 for a nonnegotiable note. Either way, a demand note on which no demand is ever made is time-barred after 10 continuous years without a principal or interest payment.
- 6
If a Mississippi promissory note is secured by personal property rather than real property, the lender generally needs to file a UCC-1 financing statement with the Mississippi Secretary of State, the state's designated UCC filing officer, to protect its priority against other creditors. (Mississippi Code Section 75-9-310)
- 7
Promissory notes are commonly used in Mississippi for family loans, small business loans, and LLC loans between members. A license is generally required to engage in the business of lending money under Mississippi's Small Loan Regulatory Law, but an occasional private lender who isn't regularly in the business of lending is exempt from that license requirement, though still subject to the state's usury rules. (Mississippi Code Section 75-67-105)
Key decisions before you file
Before you file a Promissory Note in Mississippi, a few decisions shape the document: which option to choose and what each one means. The Promissory Note guide walks through them.
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Mississippi Requirements for Promissory Note
Mississippi does not require a promissory note to be notarized or witnessed to be enforceable; notarization is optional and used only for evidentiary purposes.
To be a valid negotiable instrument, a note must be an unconditional promise to pay a fixed amount, signed by the maker, and payable on demand or at a definite time.
Commonly cited as an 8% per annum default rate absent a written rate, a written-note cap at the greater of 10% per annum or 5% above the Federal Reserve discount rate, a higher tier for loans over $2,500 involving certain business entities, and no cap at all once an individual borrower's original principal exceeds $2,000.
A license is generally required to engage in the business of lending money in Mississippi; an occasional lender not regularly engaged in the business of lending is exempt from the license requirement but remains subject to the state's usury statutes.
Generally 6 years from a missed payment, the note's stated due date, or an accelerated due date, whether the note is negotiable (Section 75-3-118) or nonnegotiable (Section 15-1-81); a demand note never actually demanded is time-barred after 10 continuous years without a payment.
The applicable rate cap is commonly described as depending on the loan's original principal balance ($2,000 and $2,500 thresholds) and whether a business entity is a party, rather than a single statewide percentage.
If a note is secured by personal property, the lender generally must file a UCC-1 financing statement with the Mississippi Secretary of State, the state's designated UCC filing officer, to perfect and prioritize its security interest.
Mississippi permits a debtor to sign an "office confession of judgment" acknowledging a debt directly at the circuit clerk's office, after which the court enters judgment at its next term; a judgment entered this way is void as to third parties if tainted by fraud or usury. This is a separate act the maker completes after default, not a clause enforceable simply because it appears in the note.
Frequently Asked Questions
Mississippi's usury rules are a ladder rather than one flat number: 8% per year as the default rate on a note with no stated rate, the greater of 10% per year or 5% above the Federal Reserve discount rate for a general written note, a higher tier for a written loan over $2,500 involving certain business entities, and no cap at all once an individual borrower's original principal exceeds $2,000. (Mississippi Code Section 75-17-1)
No. Mississippi Code Section 75-3-104 lists what makes a note a valid, enforceable negotiable instrument, and notarization isn't one of the requirements. Notarizing a note is optional and can help as evidence of who signed it, but it doesn't affect enforceability.
Include the principal amount, an interest rate consistent with Mississippi's usury rules, the repayment schedule, what counts as default, and the signatures of the maker and payee. Mississippi's confession-of-judgment mechanism is a separate court procedure the maker would have to complete later at the circuit clerk's office, not a clause you write into the note itself, so don't include one.
Yes, as long as it meets the basic requirements of a valid contract and, if it's meant to be a negotiable instrument, the elements in Mississippi Code Section 75-3-104: an unconditional promise to pay a fixed amount, a signature, and payment on demand or by a definite date. It doesn't need to be notarized to be enforceable.
An unsecured note relies only on the maker's promise to pay. A secured note is backed by collateral, and if it's secured by personal property, the lender generally needs to file a UCC-1 financing statement with the Mississippi Secretary of State, the state's designated UCC filing officer, to protect its priority against other creditors.
The payee can declare the remaining balance immediately due (if the note includes an acceleration clause) and can sue to collect. Mississippi also has its own office-confession-of-judgment procedure under Mississippi Code Sections 11-7-181 through 11-7-185, where the maker can personally sign a statement acknowledging the debt at the circuit clerk's office and let the court enter judgment at its next term, but that requires the maker's own separate act after default, not a pre-signed clause in the note.
Generally 6 years from a missed payment, the note's due date, or an accelerated due date, under Mississippi Code Section 75-3-118 for a negotiable note or Section 15-1-81 for a nonnegotiable note. A demand note on which no demand is ever made is time-barred after 10 continuous years without a principal or interest payment. Waiting too long can mean losing the right to sue on the note.
Yes. Promissory notes are commonly used for both family loans and business or LLC loans in Mississippi. A license is generally required to engage in the business of lending money under Mississippi's Small Loan Regulatory Law, but an occasional private lender who isn't regularly in the business of lending is exempt from that license requirement, though still subject to the state's usury rules.