If A borrows from B, A now owes B
Then C shows up and pays B with the agreement that it settled A’s debt to B.
A does not know any agreement was made but the original A owes B
A goes to pay B.
B says A doesnt owe B.
C says A owes C
But A did not make an agreement that he owed C.
How does A owe C now?
It seems to me that: C gave A the gift of settling A’s debt to B.
In: Economics
In the most common analogy, if you use a credit card this essentially happens.
A wants an item from B.
B gives item to A, and charges them.
A uses card of C.
C has paid B, and now A owes C.
The debt doesn’t go away. It’s a business arrangement between original debtor and specialist debt companies.
A makes a contract with B. The contract has a clause stating that it’s transferable.
C buys that contract off B for less than what A owes B.
B is happy because it they got at least a part of the money back.
C is happy because they can try to get the rest of the money.
Nothing changes for A.
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