What is the difference between Mortgage and Pledge?

The mortgage is a guarantee right that ensures the fulfillment of an obligation while a pledge is an accessory right of guarantee that assures the creditor the fulfillment of his credit through the special power conferred by the pledge given as insurance or pledged thing.

Mortgage

It is a real right of guarantee constituted to ensure the fulfillment of an obligation (such as the payment of a loan) that gives its owner the right to realize the value of an asset, which, although encumbered, will remain in the possession of its owner. providing the creditor, if the debt is not paid within the agreed term, the right to promote the forced sale of the property in order to obtain payment of the credit with its amount.

It is a real right to realize a value, but it arises from a contract before its registration in the Registry of a property to acquire the title of real right before third parties. It is regulated by law and is a unilateral contract, since it only obliges the mortgagee to transfer the real right as collateral value, but he does not lose possession of it unless he does not cancel his debt.

Garment

It is an accessory real right of guarantee that assures the creditor the fulfillment and satisfaction of his credit through the special power that is conferred on the thing that is given as guarantee or pledged thing. The pledge must be placed in the possession of the creditor, this means that there is a displacement of possession, however, he has no possibility of selling it, because it only means possession and not control of it.

Depending on the country, the laws grant you the right, when the debt is in arrears, to sell the garment at public auction and with the resulting money cover the debt. If there is money left over, it will be the property of the previous owner of the garment. If the debt is paid, the creditor must return possession of the pledge in the same state of conservation and use in which it was delivered.

Differences between mortgage and pledge

  • The mortgage falls on real estate.
  • The pledge falls on movable property.
  • The mortgage must be carried as a public deed.
  • The pledge is a real right and is not elevated to a public deed.
  • In the mortgage, the owner does not derive from the possession and use of the property.
  • In the pledge, the owner is released from the possession and use of the property.

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