diff --git a/docs/release-notes/release-notes-0.20.1.md b/docs/release-notes/release-notes-0.20.1.md
index 1c5cb7eea..541d801fd 100644
--- a/docs/release-notes/release-notes-0.20.1.md
+++ b/docs/release-notes/release-notes-0.20.1.md
@@ -106,6 +106,12 @@
   ensures dependencies are properly freed and logs the panic trace for
   debugging.
 
+* [Improved error message clarity](https://github.com/lightningnetwork/lnd/pull/10607) 
+  when a transaction would cause a peer's balance to fall below the channel
+  reserve. The error message has been updated to be more user-friendly, 
+  notifying that the transaction was rejected because the minimum safety 
+  balance must be preserved.
+
 ## RPC Updates
 
  * The `EstimateRouteFee` RPC now implements an [LSP detection 
diff --git a/lnwallet/channel.go b/lnwallet/channel.go
index 436bff1e4..08fb49b20 100644
--- a/lnwallet/channel.go
+++ b/lnwallet/channel.go
@@ -66,8 +66,8 @@ var (
 
 	// ErrBelowChanReserve is returned when a proposed HTLC would cause
 	// one of the peer's funds to dip below the channel reserve limit.
-	ErrBelowChanReserve = fmt.Errorf("commitment transaction dips peer " +
-		"below chan reserve")
+	ErrBelowChanReserve = fmt.Errorf("transaction rejected: " +
+		"peer must preserve its minimum safety balance")
 
 	// ErrBelowMinHTLC is returned when a proposed HTLC has a value that
 	// is below the minimum HTLC value constraint for either us or our