Problem
Unpaid debts
Experimental visualization of narrower problems
Other Names:
Payment arrearsMisjudged borrowing practices
Overcommited borrowing
Inability to pay
Unpaid accounts
Unpaid death benefits
Unredeemed accounts
Nature:
Debt settlement (also called debt reduction, debt negotiation or debt resolution) is a settlement negotiated with a debtor's unsecured creditor. Commonly, creditors agree to forgive a large part of the debt: perhaps around half, though results can vary widely. When settlements are finalized, the terms are put in writing. It is common that the debtor makes one lump-sum payment in exchange for the creditor agreeing that the debt is now cancelled and the matter closed. Some settlements are paid out over a number of months. In either case, as long as the debtor does what is agreed in the negotiation, no outstanding debt will appear on the former debtor's credit report.
Incidence:
In 1998, it was estimated that small businesses in the UK were owed £50 billion in unpaid invoices.
Broader Problems:
Uncontrolled growth of debtMisuse of credit facilities Narrower Problems:
Unpaid wagesPersonal debtUnpaid services depositDefaults on international loansArrears in payments for housingArrears in payment of government financial commitmentsUnliquidated obligations Related Problems:
National public debt Strategies:
Providing loans for urban developmentProviding low-interest loansProviding loans for communicationsProviding loans to fisheriesFinancing energy efficiencyProviding loans for the environmentProviding loans to the transportation sectorProviding loans to agricultureProviding loans for planning and reformProviding preinvestment loansProviding loans for educationProviding loans to industry/miningProviding loans for tourismProviding loans for export financingProviding loans for national institutional changeFinancing science and technology for developmentCompensating victims of human rights violationsDeveloping responsible borrowing patternsBorrowingProviding loansPaying debtsPaying on timeHaving bad debtsImproving ability to pay Subject(s):
Commerce → AccountingCommerce → Credit
Commerce → Currency
Commerce → Finance
Life → Death
Social Activity → Employment conditions
Social Activity → Voluntary
Social Activity → Welfare
Related UN Sustainable Development Goals:
Problem Type:
C: Cross-sectoral problems Date of last update
21.04.2022 – 09:04 CEST