Also known as subrogate. The substitution of one creditor for another. If you are subrogated to someone's claim, you have the right to pursue that claim.

For example, an insurance company may "step into the shoes" of their client to get the benefit of their client's rights and remedies against a third party involved in an insurance claim. In this example, the insurance company is subrogated to the rights of its client. As another example, a guarantor guarantees a borrower's loan to a bank. If the bank demands payment from the guarantor and the guarantor repays the loan, the guarantor is subrogated to the bank's claim against the borrower and takes on all the rights that the bank had against the borrower for reimbursement. The guarantor can then sue the borrower for reimbursement of the loan payment or enforce any security interest the bank had from the borrower securing the loan. Bank loan guaranties typically require guarantors to waive their rights of subrogation and to agree not to take any actions seeking repayment from the borrower until the bank is repaid in full.