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Failure to fulfill a debt payment obligation.

Business Glossary provided by
Default occurs when a borrower fails to make the contractual payments on a debt, whether it's interest or principal. This can lead to a variety of negative consequences, including legal action, seizure of assets, or a damaged credit rating. Defaults can happen on various types of debt, from individual credit card debt to sovereign debt held by governments. It has the potential to cause significant financial distress not only to the borrower but also to the lender and can affect the broader economy, especially if the default involves large sums or influential entities.
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