hypothecations

/haɪˌpɑθəˈkeɪʃənz/
noun
  1. The act of pledging something as collateral or security for a loan, without transferring ownership or possession.
    • In some countries, hypothecation of crops is a common way for farmers to get credit before harvest.
    • The contract included a clause about the hypothecation of the borrower's assets.
    • The bank required the hypothecation of the company's inventory to secure the loan.
  2. A legal claim or charge on property that serves as security for a debt, but does not give the lender ownership.
    • The hypothecation on the house meant the owner could not sell it without paying off the mortgage.
    • During the bankruptcy proceedings, the court reviewed all hypothecations against the company's assets.
    • The lender filed a notice of hypothecation with the county recorder's office.
  3. In modern usage, the earmarking of tax revenues or other funds for a specific purpose.
    • Some economists argue that hypothecation of fuel taxes for road maintenance makes sense.
    • The government proposed the hypothecation of a portion of the sales tax to fund public education.
    • The new law allows for the hypothecation of lottery proceeds to support environmental programs.
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