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Simple English definitions for legal terms
desperate debt
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A quick definition of desperate debt:
Desperate debt is when someone owes money that they cannot pay back. Debt is when someone owes money to another person or company. It can be a specific amount of money or all the money someone owes. Sometimes people owe things other than money, like goods or services. There are different types of debt, like secured debt (when someone owes money backed by something valuable) and unsecured debt (when someone owes money without any security). Desperate debt is when someone owes money they cannot pay back because they are broke or almost broke.A more thorough explanation:
Desperate debt is a type of debt that is either uncollectible or taken on by someone who is insolvent or on the verge of insolvency.
For example, if a person has borrowed a large amount of money and is unable to pay it back, the debt may become desperate. Similarly, if a business is struggling financially and takes on more debt to stay afloat, that debt may also be considered desperate.
Desperate debt is a risky type of debt because it is unlikely to be repaid. Lenders may be hesitant to lend money to someone with a history of desperate debt because of the high risk of default.