Wyoming Promissory Note

Introduction

Key Things to Know

1. 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. 2

   Wyoming sets no statutory ceiling on the interest rate the maker and payee agree to in writing. If the note leaves the rate blank, the default legal rate is 7% per year. (Wyoming Statutes Section 40-14-106(e)) A higher tiered cap, 36% per year on principal up to $1,000 and 21% per year above that, applies only to a lender "regularly engaged in the business of making loans" (more than 25 loans in a year), not to an ordinary private-party note. (Wyoming Statutes Sections 40-14-304, 40-14-310(g), 40-14-140(a)(xxvi))

3. 3

   A Wyoming promissory note does not need to be notarized or witnessed to be enforceable. Wyoming Statutes Section 34.1-3-104 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. 4

   Wyoming permits a confession-of-judgment clause (letting the payee obtain a court judgment without a full lawsuit) outside consumer lending, but acting on it requires the maker, or an attorney holding a signed warrant of attorney filed with the court clerk, to appear and confess with the payee's assent; it does not fire automatically the moment a payment is missed. (Wyoming Statutes Sections 1-16-201, 1-16-202)

5. 5

   Confession of judgment is banned outright for a claim arising from a consumer credit sale, consumer lease, or consumer loan under the Wyoming Uniform Consumer Credit Code. (Wyoming Statutes Sections 40-14-249, 40-14-338)

6. 6

   You generally have 10 years from a missed payment or the note's stated due date to sue to collect on a written promissory note in Wyoming, one of the longer windows among the states. (Wyoming Statutes Section 1-3-105(a)(i))

7. 7

   If a Wyoming promissory note is secured by personal property rather than real property, the lender generally needs to file a UCC-1 financing statement to protect its priority against other creditors. (Wyoming Statutes Section 34.1-9-310) Promissory notes are commonly used in Wyoming for family loans, small business loans, and LLC member loans; an isolated private loan like this doesn't require a lender's license, which Wyoming requires only for a person "regularly engaged in the business of making loans." (Wyoming Statutes Section 40-14-302(b))

Wyoming Requirements for Promissory Note

• Notarization Not Required for Validity (Wyoming Statutes § 34.1-3-104)

  Wyoming does not require a promissory note to be notarized or witnessed to be enforceable. Wyoming Statutes Section 34.1-3-104's list of what makes a note a valid negotiable instrument does not include notarization or witnessing; notarization is optional and used only for evidentiary purposes.

• Maximum Interest Rate (Wyoming Statutes § 40-14-106)

  No statutory ceiling on a rate the maker and payee agree to in writing; the default legal rate absent a written rate is 7% per annum. A separate, higher tiered cap (36% per annum on principal up to $1,000, 21% per annum above that) applies only to a lender regularly engaged in the business of making loans (more than 25 loans a year), not to an ordinary private-party note.

• Consumer Loan License Requirement (Wyoming Statutes § 40-14-302)

  Wyoming Uniform Consumer Credit Code license and disclosure requirements apply only to a lender "engaged in the business of making consumer loans," meaning one that extends credit more than 25 times a year. An isolated private person-to-person promissory note does not trigger these requirements.

• Negotiable Instrument Requirements (Wyoming Statutes § 34.1-3-104)

  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.

• Statute of Limitations (Wyoming Statutes § 1-3-105)

  Generally 10 years from a missed payment or the note's stated due date to sue to collect on a written promissory note.

• Consumer Loan Finance Charge Cap (Wyoming Statutes § 40-14-310)

  For a lender regularly engaged in the business of making consumer loans, the loan finance charge may not exceed 36% per annum on principal up to $1,000 and 21% per annum on principal above $1,000; this tiered cap does not apply to an isolated private-party promissory note.

• Confession of Judgment (Wyoming Statutes §§ 1-16-201, 40-14-338)

  Permitted outside consumer lending, but only through a formal court procedure requiring the maker's (or the maker's attorney's) appearance and the payee's assent; it is banned outright for a claim arising from a consumer credit sale, consumer lease, or consumer loan.

• Secured Transaction Filing (Wyoming Statutes § 34.1-9-310)

  If a note is secured by personal property, the lender generally must file a UCC-1 financing statement to perfect and prioritize its security interest against other creditors.