Liability

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  • In personal finance, liabilities are the amounts you owe to creditors, or the people and organizations that lend you money. Typical liabilities include your mortgage, car and educational loans, and credit card debt.

    When you figure your net worth, you subtract your liabilities, or what you owe, from your assets. The result is your net worth, or the cash value of what you own.

    In business, liabilities refer to money a company owes its creditors and any claims against its assets.


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  • Browse Related Terms: Bankruptcy, Cash flow, creditor, net worth, Pass-through security, Securitization

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