Distressed Borrower

A distressed borrow might sound redundant, but, well...it means something a bit more specific than what you maybe have in mind. You must borrow.

A distressed borrower is someone who took out a loan and can't repay it on time. Rut-roh. It could be that the borrower faced unforeseen circumstances, or it could be that they didn't understand exactly what they were signing up for (hello, 2008 mortgage market).

Distressed borrowers could be people, but can also be businesses that took out loans and failed, or aren't doing as well as they hoped. When this happens, there's a series of unfortunate events that can occur to help the bank get their money back, depending on the type of debt and the loan terms.