Subrogation is an equitable doctrine that allows a third party to be substituted for the creditor in a creditor-debtor situation. The party being substituted agrees to pay the original creditor for the debts, which enables the third party to assume the rights of the original creditor. The debtor will then be held liable to the substituted creditor, also called the “subrogee.”
Subrogation can be based either on operation of law, statute, or through a written contract, which is known as a “subrogation agreement." Since subrogation is an equitable remedy, all of the applicable defenses and theories in equity apply, such as laches and unclean hands.
Like other doctrines of equity, subrogation will be permitted based on the circumstances and facts of each individual case. However, several general conditions must be met in order for a court to approve of a subrogation agreement. These conditions can include:
Thus, subrogation rights will not be granted if a person has simply paid a debt that he or she is already obligated to pay. Also, an intermeddler, volunteer, or stranger who interjects themselves into the debt situation will not be granted rights under subrogation without a valid written agreement. Additionally, mistakenly making payments for the debtor is not grounds for subrogation.
If you are attempting to pay off the debts for another person, you should contact a lawyer before doing so. This will help you determine whether you can assume the various rights associated with subrogation. An experienced attorney can help you draft a subrogation agreement that meets the various conditions imposed by equitable principles. It is not wise to pay off someone else’s debts without their consent, as you may not be entitled to reimbursements.
Last Modified: 06-05-2014 11:09 AM PDTLaw Library Disclaimer
We've helped more than 4 million clients find the right lawyer – for free. Present your case online in minutes. LegalMatch matches you to pre-screened lawyers in your city or county based on the specifics of your case. Within 24 hours experienced local lawyers review it and evaluate if you have a solid case. If so, attorneys respond with an offer to represent you that includes a full attorney profile with details on their fee structure, background, and ratings by other LegalMatch users so you can decide if they're the right lawyer for you.