Subrogation in Lithuania

Subrogation means the transfer of a claim to a third party by way of recourse

A claim is transferred to a third party by way of recourse when:

1. The claim is satisfied from the property of a third party;
2. A third party, whose property was pledged (e.g., by mortgage) to secure the performance of an obligation, performs the obligation on behalf of the debtor;
3. A third party performs an obligation on behalf of the debtor to avoid the seizure of property, even if the property does not belong to the third party, but such seizure would result in the loss of any rights the third party may have to it;
4. The debtor and the third party who paid the debt enter into an agreement regarding the payment, and the creditor was informed of this agreement or was aware of it at the time of payment.

The third party to whom the claim is transferred cannot acquire more rights than those held by the original creditor.

By operation of law in the Republic of Lithuania, a claim is transferred by way of recourse to a third party in the following cases:

1. When a creditor pays the debt to another creditor of the debtor whose claim was secured by a pledge (mortgage) or had priority – the claim passes to the paying creditor;
2. When the acquirer of property performs the obligation to the creditor whose claim was secured by a pledge (mortgage) over that property – the claim passes to the acquirer;
3. When a person performs an obligation which they were obliged to perform together with other debtors, or in which they had a legitimate interest – the claim passes to that person;
4. When an heir satisfies the obligation of the deceased from inherited property, although not being obliged to do so – the claim passes to that heir;
5. In other cases established by law in Lithuania.