Potential event of default
|The Jolly Contrarian’s Glossary |
The snippy guide to financial services lingo.™
A circumstance which would be an event of default had an unexpired grace period expired. So, if it will be a failure to pay if miss a deadline and then don’t pay within an hour of you making a formal demand of me, the sequence is as follows:
- The point where you miss the original payment deadline, but before I have made demand: nothing.
- If you meet the payment after the deadline but before I demand it: nothing
- Once I have made the demand, if you have not yet met it, but nor has it yet expired: Potential event of default.
- Once the deadline passes, and you have not met it: Actual event of default.