Borrowers default when they breach a term of their loan agreement. For example, a home owner might go into default by failing to make scheduled mortgage payments.
This entry refers to defaults in a debtor and creditor context. For defaults in a procedural context, see default judgment.
See Debtor and Creditor Law.
Definition from Nolo’s Plain-English Law Dictionary
1) Failure to file an answer or other response to a summons or complaint in a lawsuit. After a certain period has passed, the plaintiff may ask the court for a default judgment, which means the defendant who failed to respond loses the case. A defendant who has a legally sufficient reason for failing to respond (for example, the defendant never received the summons) may file a motion asking the court to overturn the default judgment and allow the defendant to defend the lawsuit. 2) Failure to pay a debt or meet other obligations of a loan agreement. For example, a debtor may default on a car loan by failing to make required monthly payments or by failing to carry adequate insurance as required by the loan agreement.
Definition provided by Nolo’s Plain-English Law Dictionary.
August 19, 2010, 5:14 pm