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Home / Opinion Digests / Bankruptcy – Guarantor Payment – Allocation By Creditor (access required)

Bankruptcy – Guarantor Payment – Allocation By Creditor (access required)

A district court erred in allowing a creditor to allocate a payment made by a non-debtor guarantor first to interest then to principal, thus preserving the unpaid principal for collection in bankruptcy; we find that the allocation of a payment in this manner would permit the creditor to collect an amount otherwise disallowed as post-petition ...