unencumbered

adjective

un·en·cum·bered | \ ˌən-in-ˈkəm-bərd

Definition of unencumbered

: free of encumbrance

Examples of unencumbered in a Sentence

Recent Examples on the Web

Websites load quickly and my system is left unencumbered. — Chris Wilkinson, Ars Technica, "1990, meet 2018: How far does 20MHz of Macintosh IIsi power go today?," 1 July 2018 In countries around the world, people live their lives unencumbered by social media, American consumerism and Donald Trump. — New York Times, "Readers Remember Anthony Bourdain, Passionate Traveler," 12 June 2018 To focus on the human, unencumbered by some form of spectacular political narrative — no glimpses of atrocities, no backroom conversations of resistance — is another form of freedom, Huang says. — Brandon Yu, SFChronicle.com, "Yang Huang’s stories chart a family’s life in China," 27 June 2018 Upon viewing Bieber unencumbered (great memoir title for him, BTW), these were their reactions. — Chelsea Peng, Marie Claire, "Join the Internet in Gawking at Justin Bieber's Penis," 7 Oct. 2015 What on earth would possess J.R. Smith to overplay Durant so dramatically as to give him unencumbered access to the rim? — Rob Mahoney, SI.com, "Death by a Thousand Cuts: How Golden State Terrorized Cleveland at the Rim," 7 June 2018 The Slidell City Council has signed off on a $62.6 million budget that includes $6.6 million in unencumbered money that Mayor Freddy Drennan said the council might have to direct into spending accounts if sales tax collections falter badly. — Bob Warren, NOLA.com, "Slidell approves record $62.6 million budget - with a warning," 23 May 2018 There’s a pony in there somewhere—and no guarantee of success—but unencumbered by near-term business models, Amazon can explore away. — Andy Kessler, WSJ, "Columbus Discovers the Amazon," 6 May 2018 Was keeping the wizarding world secret and unencumbered by the affairs of Muggles actually worth letting Hitler kill their nonmagical relatives? — BostonGlobe.com, "Why the Jewish students at Hogwarts have to be invisible," 9 Feb. 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'unencumbered.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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Last Updated

29 Jul 2018

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The first known use of unencumbered was in 1722

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More Definitions for unencumbered

unencumbered

adjective

Financial Definition of unencumbered

What It Is

An encumbrance is a limitation on the ownership of a property. When an asset is unencumbered, there are no limitations on its ownership.

How It Works

To understand what unencumbered means, it's important to understand how encumbrances work. In the real estate world, an encumbrance is similar to a lien. The bond world also includes encumbrances. For instance, let’s consider a $100 million bond issue by Company XYZ. If Company XYZ is willing to pledge $100 million of its assets to the bondholders (that is, let the bondholders place liens on specific assets that they may seize in the event of default), giving them a little extra assurance that they will be paid on time, then the bonds would be considered securitized or asset-backed, because the assets have $100 million of encumbrances on them.

Why It Matters

Encumbrances provide security to lenders and bond investors in the case of bankruptcy or default. For example, it is important to note that debentures do not have encumbrances — that is, they are not secured by specific pieces of property or collateral and they do have a general claim on the assets and earnings of the issuer. Therefore, if the issuer were to liquidate, the holders of the debenture bonds have a claim on any assets not specifically pledged to secure other debt. Unencumbered assets can therefore help reduce the risk of debt if they become encumbered.

Companies that are extremely creditworthy often have no reason to encumber specific assets in order to sell a bond issue because they’ll still pay relatively low interest rates. (This is why debentures, which do not have encumbered assets attached, can sometimes sell for more than bonds with encumbrances from less creditworthy issuers.) Sometimes issuers also want to leave their assets unencumbered in order to make future financings possible.

Source: Investing Answers

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