appropriation of payments

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The allocation of one or more payments to one particular debt out of several owed by a debtor to the same creditor. The power of allocation belongs in the first instance to the debtor, but if he does not make an appropriation at the time of payment, then the creditor may do so. In the case of current accounts, in the absence of an express appropriation, payments are normally appropriated to the oldest outstanding debt.

Subjects: Law.

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