Simple English definitions for legal terms
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After-acquired property refers to personal or real property that a borrower gets after taking on a debt secured by all their property. This new property becomes additional collateral for the debt. For example, if a store owner pledges all their inventory to get a loan, any new inventory they acquire will also be used to secure the loan. In bankruptcy, property acquired after filing for bankruptcy is usually protected from creditors. In wills and estates, after-acquired property is property a person gets after making a will.
Definition: After-acquired property, also known as future-acquired property, refers to personal or real property that a borrower acquires after taking on a debt secured by all of their property. This property becomes additional collateral for the debt.
According to UCC § 9-204, after-acquired property includes improvements to real property used as security on a trust deed or mortgage, as well as personal property pledged in a security agreement.
The examples illustrate how after-acquired property can be used as collateral for a loan or as a way to secure a mortgage. In bankruptcy, after-acquired property is protected from creditors' claims, and in wills and estates, it refers to property acquired after making a will.