Debt Cancellation Contract

AAA

DEFINITION of 'Debt Cancellation Contract'

A contract in which a bank agrees to cancel all or part of a customer's obligation to repay a loan due to an event such as death, disability or involuntary loss of employment. A debt cancellation contract is an alternative to a life insurance plan.

INVESTOPEDIA EXPLAINS 'Debt Cancellation Contract'

Debt cancellation contracts are a product that banks offer in lieu of credit insurance plans for credit cards and other forms of bank credit. Instead of credit insurance premiums, the customer pays the bank a fee.

RELATED TERMS
  1. Return Protection

    A common, but little-known credit card perk allowing cardholders ...
  2. Loan

    The act of giving money, property or other material goods to ...
  3. Insurance

    A contract (policy) in which an individual or entity receives ...
  4. Cancellation Of Debt - COD

    When a creditor forgives a debt without requiring consideration ...
  5. Bad Debt Recovery

    A debt from a loan, credit line or accounts receivable that is ...
  6. Credit

    1. A contractual agreement in which a borrower receives something ...
Related Articles
  1. Credit & Loans

    Credit, Debit And Charge: Sizing Up The Cards In Your Wallet

    Not all plastic is equal! Learn the difference between the three kinds, and how each can affect your finances.
  2. Credit & Loans

    Digging Out Of Personal Debt

    Find out why good intentions can put consumers in an even bigger hole than before.
  3. Options & Futures

    6 Major Credit Card Mistakes

    Avoid these pitfalls to keep your credit score healthy and your debt under control.
  4. Retirement

    What You Need To Know About Bankruptcy

    Don't choose this last-resort option until you learn how it will affect your future.
  5. Options & Futures

    Top 7 Most Common Financial Mistakes

    Choose fortune over disaster by avoiding these money traps.
  6. It can be great to live in the moment, but the actions and decisions you make now can greatly impact your sense of financial security down the road.
    Personal Finance

    How Do Americans Keep Minimizing Their Net Worth?

    It can be great to live in the moment, but the actions and decisions you make now can greatly impact your sense of financial security down the road.
  7. You may owe money, but you still have rights. There's a long list of things debt collectors are banned from doing to you. Know what's illegal.
    Credit & Loans

    5 Things Debt Collectors Can't Do To You

    You may owe money, but you still have rights. There's a long list of things debt collectors are banned from doing to you. Know what's illegal.
  8. Sounds like a bad horror movie, but it really could happen to you. Here's how to identify zombie debt and send collectors back to the dead-debt graveyard.
    Credit & Loans

    How To Beat Off A Zombie Debt Collector

    Sounds like a bad horror movie, but it really could happen to you. Here's how to identify zombie debt and send collectors back to the dead-debt graveyard.
  9. Understanding how the debt collection business works will give you a better chance of coming out ahead if you ever have to tangle with a collection agent.
    Credit & Loans

    Inside Secrets Of The Debt Collection Business

    Understanding how the debt collection business works will give you a better chance of coming out ahead if you ever have to tangle with a collection agent.
  10. Debt collectors can be professional or nasty beyond belief. Here's how to fight back – and what your rights and obligations are if one contacts you.
    Credit & Loans

    How To Push Back Against A Debt Collector

    Debt collectors can be professional or nasty beyond belief. Here's how to fight back – and what your rights and obligations are if one contacts you.

You May Also Like

Hot Definitions
  1. Santa Claus Rally

    A surge in the price of stocks that often occurs in the week between Christmas and New Year's Day. There are numerous explanations ...
  2. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  3. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  4. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  5. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  6. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
Trading Center