Contract Glossary

Forbearance

Definition

An agreement where a creditor temporarily holds off on enforcing a right, typically the right to demand payment or take legal action. It's a pause button, not a forgiveness button. The underlying obligation usually remains.

In Practice

You'll encounter forbearance in loan agreements and mortgage workouts. If you can't make your mortgage payments for three months, your lender might agree to a forbearance period where they won't foreclose, but the missed payments still need to be made up later. Get any forbearance agreement in writing with clear terms on when and how you'll catch up.