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Simple English definitions for legal terms

cross-collateralization

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A quick definition of cross-collateralization:

Cross-collateralization 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-collateralization. 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-collateralization is a type of security given by all parties to a contract. It is a form of collateral that protects a creditor's postpetition extension of credit and prepetition unsecured claims, which obtain priority over other creditors' prepetition unsecured claims.

Examples:

  • When a person takes out a loan to buy a car, the car becomes the collateral for the loan. However, if the person also takes out a loan for a house and uses the same car as collateral, this is an example of cross-collateralization.
  • In bankruptcy cases, a creditor may use cross-collateralization to protect their interests. For example, if a debtor owes money on multiple loans with the same creditor, the creditor may use the collateral from one loan to secure the other loans as well.

These examples illustrate how cross-collateralization works by using the same collateral to secure multiple loans or debts. This can be beneficial for creditors as it provides additional security for their loans, but it can also be risky for borrowers as it puts more of their assets at risk if they default on any of the loans.

cross-collateral clause | cross-default clause

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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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