<p>If I refuse to pay its a default.</p>

<p>If you say I don't have to pay its a write-off.</p>

CC BY-SA 3.0
2015-02-11T23:13:57.173Z
2015-02-11T23:13:57.173Z
The Beachdancer
<p><strong>"Some form of debt write-off"</strong> means usually, <strong>mutually agreed</strong> (between creditor and debtor) elimination of a portion or the whole of debt.  </p>

<p><strong>"Partial default":</strong> I had the contractual obligation to pay EUR $100$ on Monday, but I paid only EUR $80$. Technically speaking, this is not always (or immediately) considered a "default", but a "credit incident" (alternatively it is characterized as "default on a payment" and not "default on the loan"). </p>

<p>Then <em>the reason why</em> I haven't paid the remaining EUR $20$ is crucial: Do I recognize my obligation but I am unable to fulfill it because of financial inability? Or do I <em>deny</em> my obligation, questioning the validity of the underlying contract of the debt from which the obligation to pay the remaining EUR $20$ came?</p>

<p>In the first case, the issue is whether this financial inability is deemed as "temporary" or "permanent". If it is deemed "permanent" (usually by a court decision), then in some countries the debt is officially written off by necessity, while in other countries the creditors retain the right to seek payment whenever the debtor acquires assets in the future (so the creditors may be monitoring you). If it is deemed "temporary", then the issue is to make an attempt to restructure the debt.  For Public Debt, the inability is never officially considered "permanent" so the issue is always to restructure (which of course may include a <strong>mutually agreed</strong> partial write-off, which essentially means a recognition that there exists a "partial" permanent inability to pay).</p>

<p>We could call the second case, where we question/deny the validity of our obligation, a "unilateral debt write-off", which of course is rarely if ever accepted by the creditors, and so whether it should be called a "write-off" is questionable in turn.</p>

CC BY-SA 3.0
2015-01-31T21:49:10.607Z
2015-01-31T23:05:26.540Z
2015-01-31T23:05:26.540Z
Alecos Papadopoulos
<p>From <a href="http://www.telegraph.co.uk/finance/economics/11381533/Angela-Merkel-rules-out-debt-cancellation-for-Greece.html" rel="nofollow">The Daily Telegraph</a>:</p>

<blockquote>
  <p>The new Syriza-led government has demanded some form debt write-off on the country's €317bn liabilities, two-thirds of which are owned to official creditors in the form of the EU and the IMF. </p>
</blockquote>

<p>From <a href="http://www.bbc.com/news/world-europe-31016261" rel="nofollow">BBC News</a>:</p>

<blockquote>
  <p>New Greek PM Alexis Tsipras says his country will not default on its debts.</p>
</blockquote>

<p>A <a href="https://en.wikipedia.org/wiki/Default_%28finance%29" rel="nofollow">default</a> is, according to Wikipedia:</p>

<blockquote>
  <p>In finance, default is failure to meet the legal obligations (or conditions) of a loan, for example when a home buyer fails to make a mortgage payment, or when a corporation or government fails to pay a bond which has reached maturity.</p>
</blockquote>

<p>Which leads me to the question:</p>

<p>What is the difference between <em>some form of debt write-off</em> (demanded by the Greek government) and a partial default (denied by the Greek government)?</p>

<debt><default>
What is the difference betwene a partial default and having debts partially written off?
gerrit
# What is the difference betwene a partial default and having debts partially written off?

(Asked by: username_0 on 2015-01-31)

From [The Daily Telegraph](http://www.telegraph.co.uk/finance/economics/11381533/Angela-Merkel-rules-out-debt-cancellation-for-Greece.html):

> The new Syriza-led government has demanded some form debt write-off on the country's €317bn liabilities, two-thirds of which are owned to official creditors in the form of the EU and the IMF.

From [BBC News](http://www.bbc.com/news/world-europe-31016261):

> New Greek PM Alexis Tsipras says his country will not default on its debts.

A [default](https://en.wikipedia.org/wiki/Default_%28finance%29) is, according to Wikipedia:

> In finance, default is failure to meet the legal obligations (or conditions) of a loan, for example when a home buyer fails to make a mortgage payment, or when a corporation or government fails to pay a bond which has reached maturity.

Which leads me to the question:

What is the difference between *some form of debt write-off* (demanded by the Greek government) and a partial default (denied by the Greek government)?

**Tags:** debt, default


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## 2 answers

### Answer by username_2 on 2015-01-31. Score: 3 | Accepted answer

**"Some form of debt write-off"** means usually, **mutually agreed** (between creditor and debtor) elimination of a portion or the whole of debt.

**"Partial default":** I had the contractual obligation to pay EUR $100$ on Monday, but I paid only EUR $80$. Technically speaking, this is not always (or immediately) considered a "default", but a "credit incident" (alternatively it is characterized as "default on a payment" and not "default on the loan").

Then *the reason why* I haven't paid the remaining EUR $20$ is crucial: Do I recognize my obligation but I am unable to fulfill it because of financial inability? Or do I *deny* my obligation, questioning the validity of the underlying contract of the debt from which the obligation to pay the remaining EUR $20$ came?

In the first case, the issue is whether this financial inability is deemed as "temporary" or "permanent". If it is deemed "permanent" (usually by a court decision), then in some countries the debt is officially written off by necessity, while in other countries the creditors retain the right to seek payment whenever the debtor acquires assets in the future (so the creditors may be monitoring you). If it is deemed "temporary", then the issue is to make an attempt to restructure the debt. For Public Debt, the inability is never officially considered "permanent" so the issue is always to restructure (which of course may include a **mutually agreed** partial write-off, which essentially means a recognition that there exists a "partial" permanent inability to pay).

We could call the second case, where we question/deny the validity of our obligation, a "unilateral debt write-off", which of course is rarely if ever accepted by the creditors, and so whether it should be called a "write-off" is questionable in turn.


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### Answer by username_1 on 2015-02-11. Score: 2

If I refuse to pay its a default.

If you say I don't have to pay its a write-off.


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