9. Investment Not Subject to Litigation
When a debtor can’t or won’t pay, the first thing he thinks of generally is some defense (and his imagination is unlimited on this point) against paying you: you had agreed to lend him more at the end of a year, and because you did not lend more his business failed. Or the rate of interest you charged was usurious and thus contrary to law, or you owed him something before you ever lent him the money, and this should be an offset against what he owes you. These defenses are used almost every day.
A waiver of judgment note (in states that recognize such notes) should be signed if he signs a note, and such a note will be described later. Your investment should not be subject to litigation, and before you make it, you must be sure of this fact.