April 01, 2017

Insolvency Explained: Beware Exoneration of the Guarantor

David J. Cook

Reprinted with permission from David J. Cook, Insolvency Explained (2017), at 23-27. © 2017 American Bar Association. All rights reserved. This information or any or portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.

 

Under general surety law, the creditor is obligated to exercise diligence in pursuing all rights and remedies in collecting the debt from the debtor. Diligence means chasing down the debtor with all due speed and thoroughness. In the land of litigation against guarantors, and in the face of diligence borne by the creditor as a pre-requisite against recovering against the guarantor, nice guys finish last.

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