Definition

Noun: An obligation to pay money to another party. This is a legal or formal duty requiring one party to transfer a sum of money to another, arising from contracts, loans, debts, or other agreements.

Usage

A "financial obligation" is a formal term used in legal, business, and personal finance contexts. It refers to a specific, quantifiable duty to pay money. It emphasizes the binding nature of the commitment.

Examples

• The company failed to meet its financial obligations and was forced into bankruptcy.
• Taking out a mortgage creates a long-term financial obligation.
• Before signing the lease, understand all your financial obligations, including rent and utilities.
• The court ordered him to fulfill his financial obligations to his children.

Advanced Usage

• "To discharge a financial obligation": To fulfill or pay off a debt completely.
  • He sold assets to discharge his financial obligations.
• "To be in default on a financial obligation": To have failed to make a required payment.
  • The borrower was in default on his primary financial obligation.

Variants and Related Words

• Obligation (n): A broader term for any duty or commitment, which may or may not involve money.
• Liability (n): Often used interchangeably in accounting and finance to denote a present obligation arising from past events, the settlement of which is expected to result in an outflow of resources (money).
• Debt (n): A specific sum of money that is owed or due.

Synonyms

• Debt
• Liability
• Payable
• Monetary commitment

Related Phrases

• Financial responsibility: The broader concept of managing one's financial duties.
  • Demonstrating financial responsibility is key to getting a loan.
• Debt service: The cash required for the repayment of interest and principal on a debt over a set period.
  • The country's high debt service consumes much of its revenue.

Noun

1. an obligation to pay money to another party