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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 ?
(8) In Hatchondo, Martinez, and Sapriza's (2009) model, the recover rate on defaulted bonds is zero and.
* Defaulted loan payments should be mailed to: National Payment Center, P.O.
If defaults occur in a given period, they should be assumed to occur at the end of the period, with no interest being earned on the defaulted amounts in the period that they default or thereafter.
A total of 157 wage earners or former wage earners, the third-largest group among those who defaulted, became insolvent because they were forced out of jobs, it said.
Of the 903 original Standard & Poor's defaulting issues tabulated, 78.4 percent were original issue high-yield bonds, and 21.6 percent were originally rated as investment grade but eventually defaulted. One year prior to default, 7.6 percent of the defaulted issues were still rated investment grade, and six months prior 5.8 percent were so rated.
As a debt negotiator for Lloyds Bank in Ecuador's 1995 debt restructuring, Hunter signed off on a 45% write-off on defaulted bank loans, which were then turned into Brady bonds backed by U.S.
The most important clarification is that, although it is considered to be part of the outstanding loan balance when determining the permissible amount of any future plan loans, interest that accrues on a defaulted loan after it has been treated as a deemed distribution (and consequently, taxed to the individual) is not taxable to the individual.
(2) We answer questions such as how long borrowers stay in default, what paths borrowers use to exit default, and how balances on defaulted loans change over time.
Finally, the researchers tried to understand whether consumers who were defaulted into the time-based plans remained in the plans because of procrastination or high switching costs, in which case they might not actually be better off" on the time-based plans, or because they grew to like the new plans.
Summary: A total of 54 Moody's-rated corporate debt issuers defaulted in 2014
research found that of loan default customers with origination balances of less than $50,000, only 6 percent strategically defaulted. Compare that with the one-third who strategically defaulted with loan balances of more than $ 1 million.
The default rate is a snapshot in time, representing the cohort of borrowers whose loan repayments came due between October 1, 2008, and September 30, 2009, and who defaulted on or before September 30, 2010.