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 ?
An important distinction is that the set-off is only applied to economic damages.
While not in the opinion, note that the jury found that the plaintiff's comparative negligence was greater than the defendant's and, as such, there was no joint and several liability for the economic damages, this apparently is why the trial court granted a set-off for the entire amount rather than by the Wells ratio formula, see F.
Plaintiff appealed and argued that under the set-off analysis, no set-off should have been granted because different damages were sought from the settling tortfeasors.