setoff

A setoff is the right of someone who owes money to subtract from the debt any money owed in the other direction. 

A setoff is also a defendant’s monetary demand against the plaintiff for some injury unrelated to the plaintiff’s claim. This allows the defendant to assert their own financial claim against the plaintiff, effectively reducing or eliminating the amount they owe.

[Last reviewed in June of 2024 by the Wex Definitions Team]

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