setoff

  

Definitions (3)

1.Banking: Bank's legal right to seize a borrower's any account balance (except a sub-account balance) in the same bank to apply it toward the borrower's any loan in arrears, or in anticipation of a default. In some jurisdictions (such as the US), this right is not applicable to consumer and credit card loans.
2.Commerce: Debtor's legal right to reduce the creditor's claim by the amount the creditor (claimant) owes to the debtor.
3.Litigation: Counterclaim by a defendant against the plaintiff on the basis of a transaction that is different from the one on which the plaintiff's claim is based. In legal terminology it is called equitable right to setoff.

Use setoff in a sentence

  • The important ability to setoff was taken into consideration as the customer had been a lifelong member of the bank.

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  • I was not really into the idea of a setoff, but I knew that banks did their best to maintain a fair practice.

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  • One of our competitors suffered greatly when the bank employed a setoff to recoup their loses as our competitor's profits suffered and they were unable to repay the loan they took out from the bank.

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