Forfeiture

When we do something bad and have to give up something we own.

If we decide to go all Breaking Bad and cook up drugs in our house (don’t do this), then the government could seize the house as a thank-you for the illegal activity. This is called a forfeiture. Similarly, if we decide to just stop paying our mortgage, the bank can eventually take our house as well.

It’s not just houses that can be forfeited. Cash, cars, basically any property or asset we have is subject to forfeiture. If we get sued and have to cough up a hundred grand in damages, that counts. Businesses convicted of shady behavior like insider trading or funding terrorism are also subject to forfeiture. If our house or company or whatever is forfeited, we don’t get compensated for it. It’s just gone, man.

So really, if we can, we should avoid ending up in a forfeiture scenario.