After-Acquired Clause

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DEFINITION of 'After-Acquired Clause'

A provision included in legal contracts ensuring that subsequent acquisitions of assets will be included in the debtor's liability to the lender.

INVESTOPEDIA EXPLAINS 'After-Acquired Clause'

This clause is used to provide extra protection to lenders. The clause ensures that new purchases can be seized if previously held loan payments are defaulted. This type of clause is commonly included in bond indentures and mortgage agreements.

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