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.

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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.

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For reply the giant motioned them to follow him, and set off up the beach in the direction from which they had recently come.

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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.

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With that I set off, undaunted, across the top of the isle, to fetch and carry it back.

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They ordered the lackeys not to unsaddle the gorses, and to hold themselves in readiness to set off again immediately.

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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.