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LSDefine

Simple English definitions for legal terms

cross-collateral

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A quick definition of cross-collateral:

Cross-collateral is when someone uses more than one thing as security for a loan. For example, if you borrow money to buy a car and use your house as collateral too, that's cross-collateral. It means that if you can't pay back the loan, the lender can take both your car and your house to pay off the debt.

A more thorough explanation:

Definition: Cross-collateral refers to security given by all parties to a contract. In bankruptcy, it is a security that protects a creditor's post-petition extension of credit and pre-petition unsecured claims, which obtain priority over other creditors' pre-petition unsecured claims.

Examples:

  • When a person takes out a loan to buy a car, the car becomes collateral for the loan. However, if the person also has a credit card with the same lender, the lender may require the person to cross-collateralize the loan and credit card. This means that if the person defaults on the credit card, the lender can repossess the car as well.
  • In bankruptcy, a creditor may use cross-collateral to protect their interests. For example, if a person owes money on a car loan and a credit card to the same creditor, the creditor may use the car as collateral for both debts. This gives the creditor priority over other creditors who may only have a claim to one of the debts.

These examples illustrate how cross-collateral works in practice. It allows lenders to secure their loans by using multiple assets as collateral, which can be beneficial for both the lender and borrower. However, it can also be risky for the borrower, as defaulting on one debt can result in the loss of multiple assets.

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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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