After-Acquired Property

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Also called “future-acquired property”. 

  • Personal or real property that a borrower acquires after having taken on a debt secured by all of their property, which becomes additional collateral for the debt. Based on UCC § 9-204, such property includes improvements to real property used as security on a trust deed or mortgage as well as personal property pledged in a security agreement. 
    • An example of personal property being used as after-acquired property to secure a loan is a retail store owner who pledges all of his inventory, by including an after-acquired property provision in a security agreement, in order to obtain funds from a creditor to buy additional inventory. Mortgages, specifically those affecting commercial properties, often involve the treatment of real property as after-acquired property. Mortgagees will often include in the mortgage an after-acquired property clause stating that the mortgagee will have an equitable lien in all the real property that the mortgagor obtains after the mortgage is executed. 
  • In bankruptcy, property acquired by the bankrupt person after they have filed for bankruptcy. Usually, property that has been acquired after commencement of a bankruptcy proceeding is protected from creditors’ claims and is not included in the assets that may be used to pay any of the debts that existed at the time of filing for bankruptcy. 
  • In wills and estates, property a testator acquires after having made a will.  

[Last updated in June of 2021 by the Wex Definitions Team]