July 13, 2014

Acceleration of Successive Installments in Loan Agreements

By Adrián Salgado

The Third Collegiate Court of the Twenty Seventh Circuit published legal opinion number XXVII.3o.3 C (10a),
titled: “Credit Agreement. When acceleration of installment payments agreed to for the payment of outstanding
principal and accessories occurs, payment on an installment basis is inapplicable.” In this legal opinion, the
Third Collegiate Court determined that if acceleration of installment payments for outstanding principal and
interest occurs as a result of debtor default, the obligation will no longer be in installments and will become
immediately due given that the form of payment in installments was rendered inapplicable upon the date of
default.