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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.


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.


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.


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.


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.


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.

References in periodicals archive ?
interest on defaulters in case of early debt repayment.
The 'name and shame' method adopted by the I-T dept is being seen as an attempt to recover taxes from defaulters who have been dodging officials for several years.
Some names of the big defaulters including, National Steel and Re Rooling Mill Hattar Industrial state Haripur owing Rs.
Both the mills are owned by Sharif family which are defaulters of farmers of some Rs74.
When ETO property Raiz Qureshi was contacted, he said that recovery would be done under any circumstance during the Ramazan month from the five Marla land tax defaulters of 2004 year, while fine would also be imposed.
Talking to media, he said that September 30 was deadline and notices had been served on defaulters to clear their property tax.
FAISALABAD -- Faisalabad Electric Supply Company (FESCO) has issued final notices to 17 defaulters for the payment of their arrears.
The key defaulters on payment of electricity bills outstanding dues hail from the elite class of the society.
inadequate laws for recovery of loans from the defaulters including waived off loans by
583820 from 32 defaulters in various localities Swabi-1,2 and Khodokhel sub divisions.
The officials added the defaulters were still reluctant to pay their property, luxury, commercial and professional taxes despite the repeated warnings and final recovery notices issued by these recovery teams.
The country's stock exchange set up the defaulters counter back in August 1997, on which companies with a bad track record were relegated.