chattel mortgage

Thân thiện

A family uses a chattel mortgage to buy a new car.

Definition

Noun: A chattel mortgage is a type of loan agreement where a movable personal property (the chattel) is used as collateral to secure the loan used to purchase that same item. The borrower receives funds to buy the item, but the lender holds a security interest in it until the loan is fully repaid.

Usage

A chattel mortgage is a specific financial arrangement, primarily used for financing the purchase of significant movable assets. - It is commonly used for items like vehicles, machinery, or equipment. - The term is often used in legal and financial contexts when discussing secured loans for personal property.

Examples

• The company took out a chattel mortgage to finance the new delivery truck.
• Before the era of auto loans, many cars were purchased through a chattel mortgage.
• The farmer used a chattel mortgage on his tractor as security for the operating loan.

Advanced Usage

• Legal Context: In a chattel mortgage, the legal title to the property may pass to the borrower, but the lender retains a lien or security interest. This is a key distinction from other secured transactions.
• Contrast with Real Estate Mortgage: Unlike a mortgage on real property (land and buildings), a chattel mortgage applies specifically to tangible, movable personal property.

Variants and Related Words

• Chattel (noun): An item of tangible, movable personal property (e.g., furniture, vehicles, jewelry).
• Mortgage (noun): A legal agreement by which a bank or other creditor lends money at interest in exchange for taking title of the debtor's property, with the condition that the conveyance of title becomes void upon the payment of the debt. A chattel mortgage is a specific type of mortgage.
• Security Interest (noun): A legal claim on collateral that secures payment or performance of an obligation. A chattel mortgage creates a security interest.

Synonyms

• Secured loan (for personal property): A more general term for a loan backed by collateral.
• Conditional sales agreement: A similar arrangement where ownership does not pass to the buyer until the last installment is paid. This is closely related but has distinct legal differences from a traditional chattel mortgage.

Related Phrases

• To hold a chattel mortgage: Describes the lender's position.
  • The bank holds a chattel mortgage on the company's fleet of vans.
• To be subject to a chattel mortgage: Describes the property's status.
  • The excavator is still subject to a chattel mortgage.

Notes

• The use of the term "chattel mortgage" has declined in some jurisdictions, replaced by other legal frameworks like those under the Uniform Commercial Code (UCC) in the United States (e.g., a "security agreement" and "financing statement"). However, the term is still understood and used in historical, specific legal, and some financing contexts.

Học thuật

Noun

1. a loan to buy some personal item; the item (or chattel) is security for the loan