Financial Terms / K - L / Liabilities

Liabilities

A liability can be anything a person or an organization owes to someone else. Liabilities are usually a sum of money lent to a borrower. Debts, credit card balances, mortgages, cash loans, etc., are liabilities.

In the regular course of action, the borrower's liabilities are settled over time in cash, goods, or services. In the case of houses or mortgages, the lender (usually a bank) will take possession of your property (home or car, respectively) if you cannot repay the loan.