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Ron Drescher, an attorney specializing in bankruptcy and commercial litigation, explains forbearance agreements, which arise when a borrower defaults on a bank loan. In such cases, a borrower can request the bank to halt foreclosure, asset seizure, or judgment processes. The borrower may propose to make payments or offer additional collateral to secure the bank's position. In return, the bank agrees to temporarily suspend these actions. However, banks often impose additional terms as part of the forbearance agreement, which must be adhered to for the arrangement to remain valid.
