A debt cancellation contract is an insurance contract under New York law, because the lender (the insurer) agrees to give the borrower (i.e. the amount of the debt cancelled) a sum of money (i.e. the amount of debt cancelled) based on an accidental event (death, disability or unemployment of the borrower) in which, at the time of this event, the borrower has a substantial interest that is affected by the event. While it has been argued that the difference between debt relief contracts and insurance contracts is that, in the first case, there is no dispersion of risk between a third party or a payment of compensation to the debtor, the New York definition of insurance does not impose any obligation on either of the two conditions. The expert asked whether the commercial seller could sell a “debt cancellation contract” to the purchaser of the merchandise. In accordance with the agreement, the seller would agree to terminate the debt if certain cancellation events take place. These events include the death of the buyer (unless the buyer commits suicide within two years of the date of the contract or reaches the age of 70 before the balance is fully paid) or if the property is stolen. The agreement is optional and is not required for a credit and the buyer is informed of the additional costs of the agreement. While the investigation has been conducted into debtor-creditor agreements, our response will also apply to leases, as the law is the same in both areas. Some car dealers, as well as banks and credit unions, offer subnames of “debt remission” and “debt suspension” of products or insurance. These products are similar to credit insurance in relation to their function, but fees and other functions may vary. In addition, Act 1101 , b) (3) (McKinney 2000) was added in 1994 to expressly allow a lessor or creditor to waive, under certain conditions, the spread (which is essentially the difference between the amount owed under the lease or loan agreement and the real cash value of the property that is the subject of the lease or loan agreement).
A more precise definition can be find in N.Y. Ins. Law 107 (a) (52) (McKinney 2000). With this amendment, Parliament expressly recognized that such agreements would otherwise constitute the activity of an insurance company. For further questions about debt relief contracts, please ask firstname.lastname@example.org. A debt cancellation contract (CCD) is a contractual agreement to change the terms of credit. As part of the debt cancellation contract, a bank agrees to revoke all or part of a customer`s obligation to repay a credit or credit. These contracts take effect with the arrival of a particular event, as stipulated in the contract, and most people associate them with credit card debts. Sometimes debt cancellation agreements are provided by the lender in a standardized document.