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 ?
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.
41) In the same vein, it would be improper to allow a setoff post-verdict because it is contrary to [section] 786.
57) Where there is a post-verdict reduction, it is common that there is a setoff for any costs or premiums paid by, or on behalf of, the plaintiff to obtain the collateral benefits.
The Bankruptcy Court upheld Delphi's setoff rights, subject to restrictions imposed by the Bankruptcy Code to the extent the setoff rights arose during the 90 days prior to USAT's bankruptcy filing when USAT was insolvent.
The court held that the resolution of the issues in controversy required the bankruptcy court to interpret conflicting sections of the Bankruptcy Code and to determine the proper scope of the parties' rights to dischargeability, exemption, and setoff.
Having limited the workers compensation setoff to one amount, the Illinois Court also needed to determine the manner in which the $196,000 setoff would be allocated.
Adjustments in favor of the taxpayer under subsection 247(2) ("transfer pricing capital setoff adjustments" and "transfer pricing income setoff adjustments").
When the debt finally becomes due, the debtor is empowered to declare a setoff of the debt (narrowly defined).
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.
By this argument, there would be no setoffs attributable to
Pointing to 1997 amendments to the New Jersey Surplus Lines Insurance Guaranty Fund Act, which required that parties seeking recovery from the fund must first exhaust their rights under any other solvent insurance policy against which they have a claim, and that any amount payable by the fund on a "covered claim" is reduced by the amount of recovery from other insurance policies, the fund argued that any amounts attributable to the State Security policy should be subject to a setoff in the amount from Sayre's other insurers.