Failure to repay
Whenever one comes across a set of rules or regulations, terms and conditions or even legal instructions, one must realize that they are bound to be violated either intentionally or unintentionally, which again is a different issue altogether. But what remains significant is that in each and every system or set up in the world, there will inevitably be certain individuals who would fail to conform to it and thus will become defaulter of the system or the set up. Even in the financial world, often there are instances where an individual is unable to meet the terms and conditions of the original agreement and such a situation is known as default in technical terms.
A default is generally said to have occurred when an individual has failed to fulfill the legal obligations that are stated in the contract such as being unable to make a payment on time or breaching or infringing any condition stated in the same among various others. Default essentially encompasses all sorts of contracts and obligations that include loans of both secured as well as unsecured nature and even bonds and mortgages involving all sorts of properties. Due to certain common misinterpretations, misunderstandings and misuses a set of different terms like insolvency and bankruptcy are confused with default by the common mass. However, it should be noted that not only these are three separate terms with separate meanings but they have very different implications as well. Default means nothing and nothing but the condition that an individual has not paid a debt while the term insolvency as a legal term clearly underlines the inability factor of an individual to do the same. Bankruptcy, on the other hand is associated with the intervention of a court of justice monitoring and restricting the money matters of someone who has been declared insolvent or in default.