In the CHAMP two-credit scenario, after T pays 3,000 to C, what happens to CHAMP's credit?

In the CHAMP two-credit scenario, after T pays 3,000 to C, what happens to CHAMP's credit?

• A. CHAMP's credit is discharged.
• B. CHAMP's credit remains due.
• C. CHAMP's credit is reduced by 1,000.
• D. CHAMP's credit is transferred to C.

Answer: (B)

This item tests how a third-party payment affects a CHAMP credit in a two-credit setup. In this arrangement, a debt is discharged only when the creditor accepts payment toward that specific debt or when CHAMP itself pays or is released from liability. A payment from T to C addresses C’s exposure, not CHAMP’s underlying obligation, so it does not automatically discharge CHAMP’s credit. Therefore CHAMP’s credit remains due. Only a direct payment by CHAMP, a creditor-approved full settlement, or an official release would discharge that credit.

This item tests how a third-party payment affects a CHAMP credit in a two-credit setup. In this arrangement, a debt is discharged only when the creditor accepts payment toward that specific debt or when CHAMP itself pays or is released from liability. A payment from T to C addresses C’s exposure, not CHAMP’s underlying obligation, so it does not automatically discharge CHAMP’s credit. Therefore CHAMP’s credit remains due. Only a direct payment by CHAMP, a creditor-approved full settlement, or an official release would discharge that credit.