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  1. #1
    Join Date
    Sep 2016
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    Default Can You Sue for Default if a Borrower is Making Partial Payments

    Under a promissory note, the borrower agrees that if he misses two payments the debt becomes due in full. The borrower has made payments over the last two months that are muc smaller than those required by the contract. The lender has asked for full payment, but the borrower says that the partial payments (no matter how small) prevent the collection of the full debt. Can the lender collect the full balance?

  2. #2
    Join Date
    Sep 2005
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    98,846

    Default Re: Can You Sue for Default if a Borrower is Making Partial Payments

    The answer to that question depends upon the exact language of the acceleration clause (the clause that allows for the collection of the full balance upon default). If the lender has a well-drafted contract, it may provide that the debt can be accelerated if payments are not made as required by the contract -- the full monthly payment. If not, then there may be an ambiguity as to whether any payment is sufficient to prevent acceleration of the debt, or whether the seller has the right to reject partial payment and still accelerate the debt.

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