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Ron Drescher, an attorney specializing in bankruptcy and commercial litigation, explains forbearance agreements, which typically arise when a borrower has defaulted on a loan. In such cases, the borrower may request the bank to halt foreclosure or asset seizure actions. To negotiate this, the borrower may propose making payments or offering additional collateral to secure the bank's position. In return, the bank agrees to forbear from pursuing foreclosure or repossession. However, the bank generally imposes specific terms that must be met as part of the forbearance arrangement.
