if a person fails to pay his debt, such amount is known?
A.bad debtors
B.bad debtors received
c.provision for bad debtors
d. none of the above
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Answer:
bad debtors
Explanation:
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D) none of the above When a borrower fails to pay his or her loan on time, it is referred to as a debt default.
When a borrower fails to repay a debt according to the terms of the original agreement, he or she is said to have defaulted on the loan. In the case of most consumer loans, this entails a series of missing payments over a period of weeks or months.
How the debt default works:
- Failure to return a loan results in a severe and long-term drop in the debtor's credit score, as well as extremely high-interest rates on any future loans.
- Default on debt is covered by collateral, the bank will almost definitely collect the promised asset. The most popular types of consumer loans backed by collateral include mortgages, vehicle loans, and secured personal loans.
- Default penalties for defaulted loans like credit cards and student loans vary in severity based on the type of loan.
Defaulting on a loan has a negative impact on credit scores and some loan companies. It's important to keep in mind that credit scoring models favor new data over old data.
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