Disbursement

The literal definition is "to remove from the purse." It is a formal word for payments made from a fund for specific purposes, typically to defray up-front costs.

The executor of an estate or a trustee may make disbursements to heirs and beneficiaries. An insurer under the terms of a policy covering personal property (such as an automobile) often issues a check to a policyholder once the latter has obtained a number of bids on restoration services (generally, at least three) and submitted these to the company; this payment is also considered a disbursement.

A homeowner who takes out a second mortgage receives the equity in the property in the form of disbursement check; this will represent any monies left over once the first mortgage has been paid off (known colloquially as "cash out").

If a plaintiff is awarded a sizable amount in terms of damages in a civil suit, the defendant may not necessarily be obliged or able to pay the entire amount all at once. In this case, the payment will be made in a number of disbursements, to be determined by the court.

A disbursement may also be made through the offices or firm of the plaintiff's legal counsel. Payment is made by the defendant to the law firm, which deducts any fees and recovers expenses incurred (photocopying, filing fees, courier fees, postal expenses, any amounts paid to experts, etc.) before disbursing the balance to the plaintiff.

 

 

 

 

 

 
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