What does it mean to default on an obligation?
What does it mean to default on an obligation?
To default on a debt is to fail to pay it upon its due date. Default in contract law implies failure to perform a contractual obligation.
What the meaning of defaulting?
defaulted; defaulting; defaults. Definition of default (Entry 2 of 2) intransitive verb. 1 : to fail to fulfill a contract, agreement, or duty: such as. a : to fail to meet a financial obligation default on a loan.
What does it mean to default payment?
Key Takeaways. A default occurs when a borrower is unable to make timely payments, misses payments, or avoids or stops making payments on interest or principal owed. Defaults can occur on secured debt, such as a mortgage loan secured by a house, or unsecured debt such as credit cards or a student loan.
What is meant by default account?
An account defaults when you break the terms of the credit agreement. Your creditor decides there’s no chance you can get back on track, and cancels your agreement with them. A debt can only default once, but after this happens your creditor can take further action to collect the debt.
What does it mean to default on an agreement?
Defaulting means failing to live up to one’s obligation. In contract law, when one of the parties to a contract fails to fulfill his obligation in the contract, he is said to be “in default.” Negligence is due to carelessness but defaulting is the intentional refusal to fulfill the terms of the agreement.
What is a default on a credit report?
A default is a financial term, used when a credit agreement has been broken. If you’re unable to make payments or you don’t pay the right amount, your creditor may send you a default notice. If the default is applied, it could affect your credit file.
What does default of performance mean?
Default on Performance means failure to perform an obligation stated in the Loan Agreement. Default on Performance means failure to perform an obligation stated in the Securing agreement.
What happens if you default on a contract?
When one party violates the contract, this is called default and might — depending upon the contract’s terms and how long the default lasts — void the contract or give the other party the right to terminate.
What is the meaning of default in finance?
e In finance, default is failure to meet the legal obligations (or conditions) of a loan, for example when a home buyer fails to make a mortgage payment, or when a corporation or government fails to pay a bond which has reached maturity. A national or sovereign default is the failure or refusal of a government to repay its national debt.
What happens if an entity defaults on a credit protection obligation?
If the reference entity defaults on this issue (or another specific, agreed-upon event occurs), the buyer of the credit protection on the reference obligation receives a payout. The protection buyer receives compensation for the fact that the entity has failed to make a payment on the reference obligation.
What is a ‘reference obligation’?
What is a ‘Reference Obligation’. A reference obligation is a specially designated debt obligation upon which a credit derivative, such as a credit default swap, is based and is issued by the reference entity. It does not represent all the forms of debt issued by the entity, but only a specific obligation.
What happens when a country defaults on debt?
Default (finance) A national or sovereign default is the failure or refusal of a government to repay its national debt. The biggest private default in history is Lehman Brothers with over $600 billion when it filed for bankruptcy in 2008 and the biggest sovereign default is Greece with $138 billion in March 2012.
