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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 ?
THE Reserve Bank of India ( RBI) has forwarded a proposal to the Securities and Exchange Board of India ( Sebi) suggesting barring wilful defaulters of bank loans from raising funds through capital markets.
It said the responsibility of disruption of power supply to the tubewells and street lights would fall on the provincial Government, adding that PESCO was facing difficulties in completion of all the ongoing developmental schemes and provision of facilities to the customers due to non-payment of bills by defaulter departments.
RAWALPINDI -- Excise and Taxation Department has sealed 147 commercial and residential properties here during last two days for non-payment of property tax while 60 token tax defaulters vehicles were also impounded.
CONCERNED over the fact that there are more than 10 lakh service tax defaulters out of the 17 lakh registered assesses, the government has proposed a one- time scheme called Voluntary Compliance Encouragement Scheme to lure these defaulters back into the tax ambit.
He expressed with distress that the Punjab Assembly was also defaulter.
Teams comprising 50 staff members have been set up which will put on display details of the outstanding tax on the home of every tax defaulter.
In Kohat Division from 26 defaulter consumers Rs 18 lac have been recovered while power supply of several consumers were disconnected from three distribution transformers due to non payment of Rs 3 lac outstanding dues.
PESHAWAR -- In the ongoing Disconnection and Recovery Campaign of Peshawar Electric Supply Company (PESCO), the detection team at Mattani sub-division has recovered Rs 5 lacs from 308 defaulter consumers of 11kv Ghar Chandan and Tela Ban feeders and energized the disconnected line.
Islamabad -- More than one hundred Members National Assembly including Opposition Leader in NA Syed Khursheed Shah and JUI-F Chief Maulana Fazlur Rehman have declared defaulter of Islamabad Electric Supply Company (IESCO).
State Bank of India (NSE: SBI), considered to be the biggest bank in India, and its five associate banks, had a wilful defaulter list of about 1,628 people who owe INR168.
PESHAWAR -- Due to Non-Payment of Billions of Rupees, Disconnection of Defaulter Federal and Provincial Govt Departments will start from Tuesday next (May 19).
Experts suggested there should be other legal courses for bad cheques such as withholding the passport of a defaulter, rescheduling the loan payments and granting the defaulters sometime to clear the issue.