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Simple English definitions for legal terms
amortize
Read a random definition: elements of crime
A quick definition of amortize:
Amortize: To pay off a debt slowly over time, usually by making regular payments. This helps to gradually reduce the amount owed until it is fully paid off. It can also refer to giving land to a group that will never die, like a church or organization, so that it can be used forever without being inherited or taken away.
A more thorough explanation:
Definition: To gradually pay off a debt, often by making regular payments over time.
Example 1: John took out a loan to buy a car. He agreed to amortize the loan over five years by making monthly payments. Each payment included a portion of the principal (the amount he borrowed) and interest (the cost of borrowing the money).
Example 2: The company decided to amortize the cost of a new building over 20 years. This meant that they would gradually pay off the cost of the building over time, rather than paying for it all at once.
Example 3: In the past, some people would give land to a church or other organization in mortmain. This meant that the land would be held by the organization forever and could not be sold or inherited. However, this practice is no longer allowed in many places.
Explanation: Amortizing a debt means paying it off gradually over time, rather than all at once. This is often done by making regular payments that include both the principal (the amount borrowed) and interest (the cost of borrowing the money). Example 3 shows how the related term "mortmain" was used in the past to describe the practice of giving land to a church or other organization in perpetuity. This is no longer allowed in many places because it can tie up land and prevent it from being used for other purposes.