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The failure to make timely payment of interest or principal on a debt security or to otherwise comply with the provisions of a bond indenture. A breach of a covenant. In context of project financing, a technical default signals a project parameter is outside defined or agreed limits or a legal matter is not yet resolved.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.


The failure to make payments on a debt. One may default on any debt, such as a mortgage or a bond. Default is a very serious matter and may entitle the lender or bondholder to take possession of one's assets in order to recover the amount lost in principal and interest payments on the debt. Default also has a negative impact on one's creditworthiness in the future.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


The failure to live up to the terms of a contract. Generally, default is used to indicate the inability of a borrower to pay the interest or principal on a debt when it is due. See also technical default.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.


If a person or institution responsible for repaying a loan or making an interest payment fails to meet that obligation on time, that person or institution is in default.

If you are in default, you may lose any property that you put up as collateral to get the loan. For example, if you fail to repay your car loan, your lender may repossess the car.

Defaulting has a negative impact on your credit history and your credit score, which generally makes it difficult to borrow again in the future. In fact, failure to pay on time is the single most important contributor to a poor credit history.

A bond issuer who defaults may not pay interest when it comes due or repay the principal at maturity, or both.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.


The failure to meet one's obligations in a timely manner. There are several important concepts relating to defaults in the real estate field:

• Leases and mortgages often differentiate between monetary defaults, such as failure to pay money when due, and nonmonetary defaults such as a failure to provide proof of insurance or copies of monthly financial statements. If so, there will be different notice provisions and grace periods for each.

• Unless a sale contract contains language that “time is of the essence,” or one party has made the other aware that time is critical, then a court will ordinarily award a purchaser a reasonable amount of time to complete closing, even if it is past the contract date.

• Some states have statutes allowing collection of attorneys' fees when there has been a default in the contract. Other states require specific language in the contract allowing for collection of attorneys' fees.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.


Failure of the borrower to honor the terms of the loan agreement.

Lenders usually view borrowers delinquent 90 days or more as in default.

See Payment Problems.

The Mortgage Encyclopedia. Copyright © 2004 by Jack Guttentag. Used with permission of The McGraw-Hill Companies, Inc.
References in periodicals archive ?
The KRIS service also includes a wide array of other default probability models that can be seamlessly loaded into Kamakura's state-of-the-art enterprise risk management software engine, the Kamakura Risk Manager.
It's possible to harness the power of defaults to increase personal decision success, provided you follow these simple steps.
Based on the presumption of sovereign immunity, the AGF said the US District Court is still under obligation, despite default by a Foreign State, to determine whether the Foreign State is immune from the jurisdiction of the US Court under FSIA or whether the case before it falls within one of the recognised exceptions.
Of the firms in our coverage universe, 10.63% had a one-month default probability of over 1% as of April 3, 2018.
In cases, where no tax liability is outstanding, but only the arrears of penalty and default surcharge are due to be paid, the relief package allows remission of 90% of such penalty and 75% of default surcharge, if the balance of penalty and default surcharge is deposited from May 21 to June 20, 2018.
If you miss payments, don't pay them on time or only pay them in part, the creditor can issue you with a default notice that will show on your credit history for six years and will have a negative impact if you apply for further credit during that time.
Data through July 2016 reported a first mortgage default rate of 0.66 percent in July, up one basis point from the prior month.
"Whether the default pattern for bank cards stabilizes remains to be seen," he added.
"Our report shows that the 10-year cumulative default rate for project finance bank loans is consistent with 10-year cumulative default rates for corporate issuers of low investment- grade credit quality," said Andrew Davison, a Moody's Senior Vice President and author of the report.
Moral hazard has helped student debt balloon to $1.3 trillion - colleges and universities end up with the money, while students bear the burden of repayment and the federal government carries the risk of default. If colleges bore at least a small part of the risk, it's likely that many students' debt would become more manageable and the default rate would go down.
Moody's default rate forecasting model now predicts that the default rate will end 2015 at 2.6%.