default
Default usually refers to the condition in which an entity (individual or corporate) has not paid a debt. For a strict definition of default, one must have violated a legal requirement that includes a specific time period. One can be “in default” only after not meeting the legally binding conditions of the debt.
This contrasts with “insolvency”, which specifically designates an entity incapable of meeting those debts at the current time. Insolvency does not necessarily depend on the terms of the debt, except to the extent that the entity cannot pay; e.g., a company can never be in default in advance, but a comparison of assets and expense projections can certainly lead to a company being declared insolvent before the expected debts become due.
This also contrasts with bankruptcy, which is a ruling of status by an outside party (a court of law) that an entity is in fact insolvent and ordered to pay its debts in a structured fashion determined by the court itself. No determination of default need be considered.
Default is not a general condition, although it may be loosely considered as one should insolvency be determined. One may only strictly be considered to be in default per the individual debt itself, rather than as a state of solvency or insolvency. There is certainly no reason why one cannot be in default regarding one debt and yet in complete legal compliance with the conditions of all other debts. Insolvency and bankruptcy, however, are fully encompassing statements of capability which (more or less) apply equally to all debts previously incurred by the entity.
Default, depending on the terms of the debt and of local legal structure, may be canceled simply by meeting the original debt requirements, or there may in fact be additional steps necessary to remove the default status once it has been applied. Either way when considering your future it is usually best to do whatever you need to do so that you can have the status removed from you situation. There are a lot of options for one who finds themselves in default. There are often times additional payment arrangements that can be made. It could be that simple but it will likely be a bit harder.
In many cases you will have to completely pay off the debt before the default status is removed but you may be able to settle the debt to a satisfactory level in order to get rid of it as well. These are things you should definitely look into when considering the best possible options on how to handle this sort of problem. Remember that if you settle a debt for less than that which is owed you will likely have it reported on your credit report.