Question

A 'debt trap' means _____.

• A. not able to repay credit amount
• B. ability to pay credit amount
• C. over spending till no money is left
• D. none of these

Answer 1

The correct option is A not able to repay credit amount

• Debt trap is a situation where the debtor will not be able to repay the debt incurred.
• Debt trap situation may arise due to the higher interest rates or change in terms and conditions of debt incurred.
• Normally, debt trap will result in default of payments or bankruptcies.