Legal Definitions - vermenging

Term: Vermenging
Definition: Vermenging is when a debt is cancelled because the debtor and creditor become one entity. This happens in situations like a company merger, where the debt owed by one company is cancelled because it is now part of the new merged company.
Examples: When Company A merges with Company B, and Company A owes money to Company B, the debt is cancelled because they are now one company. Another example is when a person owns a business and owes money to the business, but then decides to make the business a sole proprietorship, the debt is cancelled because the person and the business are now one entity.
Explanation: Vermenging is a legal term that describes the cancellation of a debt when the debtor and creditor become one entity. This can happen in various situations, but the most common is in corporate mergers. The examples illustrate how the debt owed by one entity is cancelled because it is now part of the new merged entity.