There is no deed or contract that is too difficult to understand, especially when one person agrees to pay the debt of another as a favor to that person. However, it does happen sometimes that there is a misunderstanding that ends up in a lawsuit. This happens most often with personal injury cases where one party sues the other party for some reason. In cases like this, when one person agrees to pay the debt of another as a favor to that person, the person who agreed to pay that debt also has an obligation to compensate the injured party for any damages that they sustain as a result of injury.
In situations like these, a judge is likely to rule: in favor of the one who was injured. In a personal injury case, when one person agrees to pay the debt of another as a favor to that person, the person who agrees to pay that debt has an obligation to compensate the injured party for any damages that they sustain as a result of injury. This means that the injured party must bear the entire award, and the person who pays that money must cover all reasonable expenses that arise as a result of injury. The party who pays the money does not have to worry about satisfying that obligation; they simply need to pay the money and keep their obligations to the person who was injured. If the injured party sues that person who pays that money, then the person who pays the money must help that injured party to cover their legal costs.
It might seem that there are many exceptions to the rule: when one person agrees to pay the debt of another. However, one of the most common exceptions to the rule is when one person agrees to pay the debt of another because that person is actually damaged financially. For example, if you were hit by a car, and you were told that you would be unable to make your payments until certain payments were made, and that you had agreed to pay the car maker until such time as you could afford to pay the car maker, you would be considered to have been injured in an involuntary situation. The car maker would be able to sue you for the injuries you sustained as a result of the car accident. You would then be liable for those injuries. If you agree to pay that money, you will be releasing yourself from liability for those injuries.
Another exception to the general rule: when one person agrees to pay the debt of another is when one person agrees to pay the debt of another because that person has some form of collateral which is worth more than the total amount of money the individual owes to the other. Collateral may include a house or other real property. In that event, the individual who owes money may agree to pay that money back even if the individual ends up losing that house or other property. This is called an equity release, and it protects the lender from losing any of its money.
A third exception to the rule: when one person agrees to pay the debt of another comes when one person agrees to pay the debt of another solely because of a personal feeling of compassion. For example, suppose you owed money to a friend who was ill and dying of cancer, but you owed money to a friend who was still alive. You might feel that you should pay the ill friend’s debt because you truly cared about him. You could say that you agreed to pay the debt because you wanted to help him while he was fighting his cancer.
In the final analysis: we often find ourselves with situations where one person pays the debt of another solely on the basis that they agreed to do so. These are known as settlement agreements and are not really considered to be illegal if done properly. However, you should keep in mind that the IRS can eventually come after you for this money.
It is definitely not a good idea to use these types of situations when you are trying to settle your personal debts.
