Setoff

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Setoff

Money held on behalf of a borrower that may be applied to repay the loan, but usually without the permission of the borrower.

Setoff

1. The ability of a debtor to reduce the amount of one's debt by an amount the creditor owes to the debtor. Thus, if a debtor owes a creditor $20,000 but the creditor owes the debtor $5,000 in an unrelated matter, setoff allows the debtor effectively to owe only $15,000.

2. In banking, the right of a bank to seize a debtor's account balance held at that bank if a debt is in or near default. Some jurisdictions limit the right of setoff; for example, the United States does not allow it to apply for commercial loans or credit card debt.
References in periodicals archive ?
Bo's set-off right can be conceptualized as an "entitlement to pay with Bo's property" as opposed to an "entitlement to seize and liquidate Al's property " (18) In this sense, the right of set-off is distinguishable from a scenario in which Al specifically grants Bo a security interest in Al's property to secure repayment of Al's indebtedness to Bo.
In Canada, set-off is generally subdivided into three categories: legal, equitable and contractual.
Equitable set-off can be conceptualized as a relaxation of the strict rules of legal set-off.
A set-off typically is allowed only where the same "damages" are claimed from the multiple defendants.
At a hearing on motions for summary judgment, the trial court granted a set-off to Safecare for the full amount of the previous settlement.
The court held that in this case, there should be no set-off for the settlement of the second dentist because there were different damages caused by each defendant; notwithstanding the fact that some of the injuries were aggravated -- there were additional separate injuries caused by the dentists and, therefore, there would be no setoff.
In Ohio and Kentucky, there are three elements which determine whether the action by the creditor bank is a set-off rather than a freeze or hold: The bank has made a decision to set-off the account; and the bank has taken some action which accomplishes the set-off; and the bank has made some record which evidences that the right of set-off has been exercised.
Thus, if the bank has made a decision to set-off the account, removes the funds from the account, and records the transaction in its books and records, a set-off has taken place.
Following this set-off and the partial repayment, the outstanding amount under the NEC 07 bond loan is now USD6.
Set-off becomes an issue in the case of an insolvency of the insurance company providing the savings product, Mr.
Despite mortgage products explicitly prohibiting the use of set-off, the issue could still be reversed by the Dutch courts.
collateral, and set-off cash collateral held with ABL; and