Affordability Assessment
/əˌfɔːrdəˈbɪləti əˈsɛsmənt/
Definitions
- (n.) A systematic evaluation of an individual's or entity's ability to meet financial obligations under legal agreements or regulatory frameworks.
The court conducted an affordability assessment before approving the repayment plan.
- (n.) An analytical process used by lenders or regulators to determine whether proposed payments or fees are reasonably sustainable for the obligated party.
The affordability assessment ensured that loan repayments would not cause undue financial hardship.
Forms
- affordability assessment
- affordability assessments
Related terms
See also
Commentary
Affordability assessments are critical in contexts such as loan approvals, bankruptcy proceedings, and regulatory compliance to ensure fairness and prevent financial overextension.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.