Verpfändet

Verpfändet describes a form of security interest in which a debtor offers property as collateral for a claim. The pledge creates a Pfandrecht (lien) on the pledged asset, so the creditor has security for the owed amount. In practice, verpfändet is commonly used for movable property such as goods, equipment, or financial assets; real estate normally secures debt through mortgage (Hypothek) or land charge (Grundschuld) rather than a verpfändet arrangement.

Creation and possession: A verpfändung arises from an agreement between creditor and debtor and typically involves transferring possession of the pledged item to the creditor or to a custodian. The debtor generally remains the owner, but the creditor gains a substantive claim against the pledged asset as security for the obligation. The creditor’s lien allows enforcement if the debtor defaults.

Effects and rights: With verpfändet, the creditor has a secured position in the pledged asset and may realize the value of the collateral if the debtor fails to meet the obligation. In a sale or other disposition, the proceeds are used first to satisfy the secured claim; any surplus beyond the debt typically goes to the debtor. The pledged asset remains subject to the lien until the obligation is fulfilled and the lien is released.

Termination and remedies: The lien ends when the debt is paid or the security is released. If the debt is paid, the creditor must return the pledged item or restore possession as agreed. If the debtor defaults, the creditor may enforce the lien, potentially through sale or other authorized disposition, in accordance with applicable law and procedure.

See also: Pfandrecht, Sicherungsübereignung, Hypothek. The term verpfändet also appears in everyday language to denote that an asset has been pledged as collateral.