The Effect of Transition collateral contracts on securities of debt

The establish of a legal relationship between individuals, whether in the form of a contract or outside it, is inevitable. These legal relationships sometimes appear in the context of debt and claim. In order to guarantee and facilitate the collection of claims, Creditor may have received a security from a debtor in order to take advantage of those securities, in case of impossibility of collection of debts from debtor directly. However, sometimes, After the creation of collateral, basic debt may be the subject of a contract that can be named as a transition collateral contract. There are doubts about how the formation of these types of contracts have an effect on the securities of basic debt. Some believe that after concluding of transition collateral contracts, preceding securities of basic debt will be collapsed; However, others believe that the preceding securities of basic debt will be remain. For each of these views, there are some reasons. In general, the second view seems to be stronger. In this article, the author has tried to examine the reasons for each of the above views from an analytical point of view in order to explain the correct point of view.