Which of the following constitutes default?
A)repaying a debt before it is due
B)bankruptcy of the debtor
C)increase of rate of interest by the creditor midway through debt repayment
D)theft of the collateral

Question

Quizplus · Accepted Answer

Default refers to the failure of a borrower to repay a debt as agreed. Bankruptcy of the debtor is an example of default. Option A is not default as repaying a debt before it is due is actually beneficial to the creditor. Option C is not default unless the creditor had previously agreed not to increase the interest rate. Option D is also not default unless the theft of the collateral leads to the inability of the debtor to repay the debt.

Which of the Following Constitutes Default