HopefullyInLawSchool
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LSDefine
Simple English definitions for legal terms
free and clear
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A quick definition of free and clear:
Free and clear means owning something completely without any debt or loans attached to it. This usually applies to real estate, but can also apply to other things like cars or appliances. If someone has a mortgage or loan on their property, they don't own it free and clear. But once all the debt is paid off, they will own it completely without any obligations.
A more thorough explanation:
Definition: Free and clear means that someone owns property without any debt attached to it. This applies to real estate, cars, appliances, and other items. When there is a mortgage, loan, or lien attached to the property, the person does not own it free and clear. However, once all debt is paid or released, the person will own the property free and clear.
- John bought a house for $200,000 and took out a mortgage for $150,000. He still owes $100,000 on the mortgage, so he does not own the house free and clear.
- Sarah inherited a car from her grandfather. There is no loan or lien attached to the car, so she owns it free and clear.
- Mark bought a refrigerator on credit and still owes $500 on it. He does not own the refrigerator free and clear.
The examples illustrate the definition of free and clear by showing situations where someone either does or does not own property without any debt attached to it. John's house and Mark's refrigerator are not owned free and clear because there is still debt attached to them. Sarah's car, on the other hand, is owned free and clear because there is no debt attached to it.