Definition
Anything you owe: mortgage principal, student loans, auto loans, card balances. Assets minus liabilities equals net worth.
Why it matters
Liabilities are half of the net worth equation and the half people avoid adding up. Seeing the full list, with APRs, is the starting gun of every payoff plan.
Example
A household lists a $300,000 mortgage, $18,000 car loan, $22,000 of student loans, and $4,000 on cards: $344,000 of liabilities against $500,000 of assets, for a net worth of $156,000.
Put it into practice
Related terms
This definition is educational, not financial, legal, or tax advice. U.S. rules and limits change; verify time-sensitive details with official sources. See our disclaimer.