Misconception · MIS:covenant-breach-always-means-current

Mistaken idea “Every covenant breach makes debt current”

Mistaken reasoning: This mistake skips cure, grace, waiver, lender right, future compliance, and specialized classification facts.

Updated Aug 21, 2026 Review due Sep 30, 2026

Why this is mistaken

Document the contractual consequence, cure and waiver facts, timing, and current guidance. A breach is critical evidence, not a complete answer.

Where to watch

When this mistake may appear

  • A ratio covenant is missed at year-end.
Check your work

Your work may contain this mistake if:

  • The entire debt is automatically current without reading the agreement.