PLEDGOR Meaning and
Definition
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A pledgor is a term used in the context of legal and financial transactions, particularly in the field of secured financing. The pledgor refers to an individual or entity that provides an article of personal property or asset as collateral or security for a debt or an obligation.
When a party borrows money or seeks credit from a lender or financial institution, the lender often requires some form of security to ensure repayment. In such cases, the pledgor voluntarily pledges personal property as collateral for the loan. This can include assets such as real estate, vehicles, stocks, bonds, or any other valuable possession.
By pledging the collateral, the pledgor guarantees that, in case of default or non-payment, the lender has the right to seize or sell the pledged property to recover the outstanding debt. The pledgor retains ownership of the property, but it is subject to the lender's rights until the debt is repaid in full.
The pledgor has a legal duty to maintain the pledged property's value and preserve its condition until the debt is satisfied. Additionally, the pledgor may have certain obligations to notify the lender about any changes or third-party interests affecting the pledged property.
Overall, a pledgor's role is essential in securing financial transactions by providing collateral, which potentially mitigates the risk for lenders and helps ensure debt repayment.
Common Misspellings for PLEDGOR
Etymology of PLEDGOR
The word "pledgor" is derived from the Middle English term "pleggen", which means "to pledge". The term "pledge" originates from the Old French word "plege", which comes from the Latin term "plēgium" or "pignus". The Latin term "plēgium" refers to a pledge, security, or guarantee given as collateral for a debt or obligation. Over time, "pleggen" and "pledge" evolved into "pledgor", referring to a person who pledges something as security or collateral.
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