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Forbearance

Definition - What does Forbearance mean?

A forbearance is a period of time in which a creditor allows a debtor to skip payments on their debt. Creditors will often do this when their debtors have need to skip payments, and when they agree to pay more in the future to compensate for the forbearance period

Justipedia explains Forbearance

Debtors may undergo forbearance for a number of reasons. They may be going through difficult financial times. They may have health problems which temporarily prevent them from working. Many creditors will allow debtors the option to enter a forbearance period when they desire to do so. During this time, the creditor stops collecting, but the debtor will still have to pay for this period later. They will often have to pay extra money because they chose forbearance. So, forbearance can serve the purpose of alleviating temporary debt repayments. However, they come at a price.

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