adjustment
Adjustment is a settlement , allowance, or deduction made on a debt or claim that has been objected to by a debtor or creditor in order to establish an equitable arrangement between the parties.
For tax returns, an IRS -approved change to tax liability is considered an adjustment.
When money is owed to a lender, debt adjustments are made by creditors or judges who exempt debtors from a part of their obligation, in light of ongoing circumstances; like insolvency .
In insurance law, an insurance company’s settlement on a claim is referred to as an adjustment. The company’s adjustment reflects the sum of money the company is willing to pay on behalf of a claimant after negotiation and consideration of the parties’ gains, losses, and rights.
Set-offs , contributions , and subrogation are also examples of adjustments.
A set-off is a statutory defense to all or a part of a plaintiff’s monetary claim. It also refers to the adjustment of losses against profit or income by a taxpayer in a particular tax year.
A contribution is a payment made between defendants with joint and several liabilities in order to apportion, or adjust, for liability .
Subrogation is the substitution of one person or group in the place of another with reference to a lawful claim, demand, or right, whereby the subrogating party assumes the rights and duties of the original party.
[Last reviewed in June of 2021 by the Wex Definitions Team ]
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