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Warning
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LSDefine
Simple English definitions for legal terms
confusion of debts
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A quick definition of confusion of debts:
Confusion of debts is when someone owes money to another person, but then they become the same person. This can happen when a debtor marries their creditor or when someone inherits a debt from their creditor. When this happens, the debt is cancelled because it doesn't make sense for someone to owe money to themselves. It's like if you borrowed money from your left hand and then your left hand became part of your right hand - you wouldn't owe yourself money anymore.A more thorough explanation:
Confusion of debts occurs when the rights and duties of a creditor and debtor are blended in the same person, resulting in the extinction of obligations. This means that the creditor's right to collect the debt is no longer valid. This concept originated in Roman law and is also known as confusion or confusion of rights.
For example, if a person owes money to a company and then becomes a shareholder in that same company, the debt is considered to be confused or merged with the shareholder's rights. The shareholder cannot collect the debt owed to them because they are now part of the company that owes the debt.
Another example is when a debtor marries their creditor or becomes their heir. In this case, the debt is merged with the creditor's rights, and the creditor cannot collect the debt anymore.