Legal Memorandum: Cause of Action for a debt & Guaranty

Issue: Under Minnesota law, does a cause of action accrue for a debt and for the guaranty of that debt arise simultaneously?

Area of Law: Bankruptcy & Creditors Rights
Keywords: Cause of action to collect a debt; Cause of action to enforce a guaranty
Jurisdiction: Federal, Minnesota
Cited Cases: 849 F.2d 354
Cited Statutes: None
Date: 01/01/2013

A cause of action to collect a debt accrues “when the creditor accelerates the debt, not when the default or other event on which acceleration is based occurs.”  See 16 Causes of Action 391, Cause of Action to Accelerate Maturity of Debt § 23 (2012); United States v. Feterl, 849 F.2d 354 (8th Cir. 1998).  A cause of action to enforce a guaranty does not accrue until the creditor takes affirmative action to make it known to the borrower that it has exercised its option to accelerate.  Feterl, 849 F.2d at 356-57.    


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