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LSDefine

Simple English definitions for legal terms

collateral

Read a random definition: testamentary gift

A quick definition of collateral:

Collateral: When someone borrows money, they may have to give something valuable, like a house or car, to the lender as a promise to pay back the loan. This valuable thing is called collateral. If the borrower can't pay back the loan, the lender can take the collateral and sell it to get their money back. The value of the collateral is usually less than what it's worth because the lender needs to make sure they can sell it quickly if they have to.

A more thorough explanation:

Collateral is something valuable that a borrower pledges to a lender to guarantee a loan. If the borrower fails to repay the loan, the lender can take possession of the collateral and sell it to recover the money owed. The value of the collateral is usually less than its market value because it takes into account the cost of selling the asset quickly.

  • A person who takes out a mortgage to buy a house pledges the house as collateral for the loan.
  • When someone borrows money to buy a car, the car becomes the collateral for the loan.
  • A business owner who needs a loan to buy equipment may pledge the equipment as collateral.

These examples illustrate how collateral works. If the borrower fails to make payments on the loan, the lender can take possession of the collateral and sell it to recover the money owed. For example, if a homeowner defaults on a mortgage, the lender can foreclose on the house and sell it to recover the money owed. The same is true for a car loan or a business loan secured by equipment.

collaborative law | collateral attack

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General

General chat about the legal profession.
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medicine is a scam
join the ethically ambiguous legal field instead
Dkk
18:57
I want to meet an attorney that defends clients who run into flat earth problems. I want an attorney that knows and believes in flat earth theory.
19:05
i want a flat earther for president. i want a guy who posts on 4chan for president. i want someone who mogs for president.
Dkk
19:18
Exactly. My version of that awful poem.
Dkk
19:19
I can accept a president with maybe one or two of the poems traits hut good God, all of them??? No ty.
windyMagician
19:20
president who respects sex is crazy
windyMagician
19:20
we had bill clinton already
Dkk
19:21
Bill Clinton, first and last black president
windyMagician
19:23
I want to go running but my leg feels weird
windyMagician
19:23
it doesn't hurt its just tingly
Dkk
19:26
It needs more alcohol. You tingle when your nerves need watering.
19:27
try stretching it maybe to see what's up
windyMagician
19:27
stretches make me think it's just soreness
windyMagician
19:27
I'm sober lol
Dkk
19:38
Anyone else get the google notification that your LSD password has been compromised lol. LSD got hacked.
20:48
what.jpg @Dkk
CynicalOops
21:03
You think you just fell out of a coconut tree?
jackfrost11770
21:10
nope dk
CynicalOops
22:37
Calvinamala Harris
jackfrost11770
23:16
should i start using letterboxed again
Dkk
23:25
@jackfrost11770: if you want but like it aint for me
dk do u ever eat at bk
Dkk
23:48
@chickenburgahfart: I would do that in the Army if really desperate for food or if I had to work through lunch. One of the few fast food places I go to.
bk so slept on
Dkk
0:23
I will take In N Out everyday over it when I can though.
texaslawhopefully
1:22
In N Out is not only the best fast food place, but the prices too are fantastic
Dkk
1:27
Indeed, indeed.
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