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Simple English definitions for legal terms
equity of subrogation
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A quick definition of equity of subrogation:
Equity of subrogation is the right of a person who pays someone else's debt to take over the original creditor's rights and remedies against the debtor. This includes the right to foreclose on any security held by the creditor and the right to seek contribution from others who are liable for the debt. It's like stepping into someone else's shoes and being able to do what they could have done. This right can arise by contract or by operation of law to prevent fraud or injustice.
A more thorough explanation:
Equity of subrogation refers to the right of a person who pays off a debt to take over the rights of the original creditor. This includes the right to foreclose on any security held by the creditor and the right to seek contribution from others who are liable for the debt.
For example, if a surety pays off a debt owed by a debtor, they are entitled to the same rights and remedies that the original creditor had against the debtor. This includes the right to use any remedy against the debtor that the creditor could have used, such as a mortgage, lien, or power to confess judgment.
There are two types of subrogation: conventional and legal. Conventional subrogation arises by contract or by an express act of the parties, while legal subrogation arises by operation of law or by implication in equity to prevent fraud or injustice.
Overall, equity of subrogation allows a person who pays off a debt to step into the shoes of the original creditor and enforce their rights against the debtor.