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 classic literature ?
When the contents of the letter were ascertained, John Thorpe, who had only waited its arrival to begin his journey to London, prepared to set off.
For reply the giant motioned them to follow him, and set off up the beach in the direction from which they had recently come.
At the outskirts of the village I left her without even seeing the sort of people who inhabited it, and set off through the growing darkness toward the south.
With that I set off, undaunted, across the top of the isle, to fetch and carry it back.
They ordered the lackeys not to unsaddle the gorses, and to hold themselves in readiness to set off again immediately.
Adam, after making an ineffectual attempt to eat, put the food in his pocket, and, drinking a draught of ale, declared himself ready to set off.