Which practice is described as allowing a new party to assume payments?

Which practice is described as allowing a new party to assume payments?

• A. Forbearance agreement.
• B. Lease extension.
• C. Transfer Assumption Agreement.
• D. Debt settlement.

Answer: (C)

Assuming payments means the debt obligation is transferred to a new party who will be responsible for making the payments. A Transfer Assumption Agreement is the formal contract in which a new borrower agrees to take over the existing debt and continue making payments under the same terms, typically with the lender’s consent. Sometimes the original borrower is released (a novation); other times they may remain liable if the release isn’t granted. The essence is that the new party assumes the ongoing payment duty. The other options don’t describe this transfer of payment responsibility: a forbearance agreement just pauses or reduces payments for a time; a lease extension changes the lease term rather than transferring debt obligations; a debt settlement negotiates paying less than the full amount owed, without another party taking over the payments.

Assuming payments means the debt obligation is transferred to a new party who will be responsible for making the payments. A Transfer Assumption Agreement is the formal contract in which a new borrower agrees to take over the existing debt and continue making payments under the same terms, typically with the lender’s consent. Sometimes the original borrower is released (a novation); other times they may remain liable if the release isn’t granted. The essence is that the new party assumes the ongoing payment duty.

The other options don’t describe this transfer of payment responsibility: a forbearance agreement just pauses or reduces payments for a time; a lease extension changes the lease term rather than transferring debt obligations; a debt settlement negotiates paying less than the full amount owed, without another party taking over the payments.