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 ?
41) In the same vein, it would be improper to allow a setoff post-verdict because it is contrary to [section] 786.
76 disallow a setoff post-verdict when Medicare is involved, the logical conclusion would be that the existence of benefits received under Medicare are admissible at trial.
Because of this greater burden, the primary carrier should also be the first to receive the benefit of the setoff in order to reduce the coverage upon which the insured has first claim.
The dissenters argued that the workers compensation setoff benefit should be prorated among the applicable insurers because both insurers bore similar risks and because both the Chicago Motorist and the Northland policies contained clear language entitling both of them to reduce benefits because of workers compensation funds received by the claimant.
The Aspen court perhaps stretched Debtor and Creditor Law section 151 to cover setoffs in the face of a restraining notice, (514) but section 151 cannot be made to extend to payments where the creditor chooses to lose rather than use the setoff opportunity.
528) Although a lien interferes with setoffs in the absence of section 151, the very purpose of section 151 is to permit post-lien advances to be used in setoffs.
In other words, silence in the final judgment is not enough because silence might merely mean that the issue of credits and setoffs was never presented to and/or addressed by the court.
When the debt finally becomes due, the debtor is empowered to declare a setoff of the debt (narrowly defined).
The appellate court held that the husband was entitled to a 50 percent credit of the reimbursable household expenses he paid from separation to the date of sale without considering the matter of a 50 percent fair rental value setoff.
Obviously, if the defendants are the offerees there is also a practical need for a plaintiff to evaluate the separate amounts offered by vicarious defendants in a joint offer since the plaintiff cannot accept only part of a joint offer and, thus, Fabre setoff concerns are raised.
On the other hand, because the statute confines setoffs for noneconomic damages to settlements within the same category of defendants, a nonpractitioner who would have otherwise enjoyed a full setoff for all sums paid in settlement by one for whom it was vicariously liable (20) may no longer be entitled to such a setoff.
Cutting back setoff will not be transactionally easy.