What Does In Lieu Of Mean?
You often hear of the phrase “in lieu of” not just in everyday life, but also in the business sense. However, believe it or not, it’s often used incorrectly by many people. So what does it mean? Is there some secret to using the phrase? In this post, we’re going to talk about what the definition of “In Lieu of” is, and what exactly it means (commonly misspelled “in lue of” or “in lou of” or “in lew of” or even “in leau of”). There’s often a deeper meaning involved when someone uses this term than we may think. And if it’s used in the business sense, it can be used as a way of an exchange or a loan.
What it Means
In lieu of is actually a phrase that’s derived of English, Latin, as well as French and Middle English. Basically, the French interpreted the term from the Latin word locus that stands for “place”. Therefore, they’re essentially saying in place of or to replace. Since then it’s used a lot meaning okay, you’re out of this, give me something in place of cash.
What this means in Business
This is often used in foreclosure situations in the real estate markets. You’ll hear the term “in lieu of foreclosure” which means that the borrower can actually avoid foreclosure by giving their property as a means of collateral to refinance their home and avoid foreclosure, foreclosing costs or more. Basically this becomes an agreement between the lender and the borrower as a means of a good faith payment.
This happens the most when the borrower causes a loan to be in default. This can also happen when it comes to financial plans in which they “settle” for an agreement in financial institutions for things like student loans, or even in personal loans. Often times, at the end of the loan if it defaults, then the borrower can pay by other means instead of paying the lender the original amount in cash.
The Title Loan Way
When you get a title loan, it’s possible that due to the high payments you pay each month, you’ll end up possibly defaulting. When this happens, the company will take the care that you put the title up for, and this is the “same as cash”. Therefore, you give the title up for collateral, and if you should default on the loan, they take the car instead of you paying the cash. Otherwise you have to pay the entire amount of the loan back plus the interest. However, if they take the car, it’s on them in order to sell it and count their losses or try to get their return on investment.
In a sense though, no matter how this term is used, it basically means that your debt is completely wiped of the defaulted loan, and you don’t have to face the public when it comes to getting your loan defaulted, and all debts are essentially null and void. It won’t affect your credit score in these cases either, so you can avoid not being able to buy a home or vehicle later.
Conclusion – In Lieu Of
Many businesses also use this when it comes to investing. So just remember that if someone says that they’re getting something in “lieu” of, they’re just saying that they’re getting something or asking for it in place of something else.