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LQuick
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Topic: Holder in due course
Started: 9/08/09 Current Grade: A
Posts: 3 Topic Type:
I am trying to find some information on states that have "holder in due course". Can anyone help me find this information? Thanks.
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Financexaminer
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# 1
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Posted: 09-09-2009   Current Grade: A
Hi, sorry, are you asking about states that "allow" assignments????? If so, they all do. Good Luck with it. Bill
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ecosentry
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# 2
Default Holder in due course
Posted: 09-10-2009   Current Grade: A
Most references are for notes or financial promises to pay (commercial paper) being held by 3rd parties

A holder in due course (HDC) is a person who takes a negotiable instrument, such as a promissory note, for value without knowledge of any apparent defect in the instrument nor any notice of dishonor. (Black's Law Dictionary 2nd Pocket ed. 2001 pg. 322). Status as a "holder in due course" is an affirmative defense against all legal claims the debtor may have against the original creditor. In other words, a "holder in due course" does not become responsible for the original creditor's alleged misdeeds in the original credit transaction.

A person typically becomes a "holder in due course" through the following steps: (1) an original creditor loans money to a person in return for a promise to repay that money with interest; (2) The original creditor then sells the credit contract (the right to receive repayment of the loan) to a "new creditor" (such as a bank); and (3) the new creditor takes the debt without any knowledge of (a) a defect in the note, (b) any misrepresentations made by the original creditor to the debtor, or (c) any other act that would give the debtor a legal claim against the original creditor.
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Nick_Brian
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# 3
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Posted: 09-11-2009   Current Grade: ?
That's a lot for holder in due course. i wish learned this a lot ago. I was always confused, now it's gone.
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