A borrower who has failed to make a payment of principal or interest when due or meet any other requirement of a credit agreement is said to be in

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When a borrower fails to make a payment of principal or interest when due or meet any other requirement of a credit agreement, they are said to be in default. Being in default can result in penalties, fees, and even legal action by the lender. Arrears refers specifically to unpaid payments, while foreclosure and rescission are related to specific legal remedies in the event of default.

A Borrower Who Has Failed to Make a Payment of Principal