DEFAULT Definition

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DEFAULT, in finance, default is what occurs when a party is unwilling or unable to pay their debt obligations. This can occur with all debt obligations including bonds, debentures, mortgages, loans, and notes. Default can also occur with sovereign bonds, that is, governments can default on their payments to creditors. In corporate finance, a default is typically a prelude to bankruptcy. With most mortgages and loans the total amount owing becomes immediately payable on the first instance of a default of payment.

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SUPRANATIONAL is transcending established national boundaries or spheres of interest (Example: A supranational company).

ONEROUS CONTRACT is one in which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits to be received under the contract.

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