How state succession deals with debts and loans
The issue relating to state succession deals with debts and loans. When a new state comes into existence, the question arises as to the payment relating to the debt owed by the former state. There is no general rule regarding the solution of this problem but the more followed and better approach taken is that the new state would have to pay off the loan. Both the states former and new undertake an agreement (bilateral) as to settle the issue and procedure for paying off the debt owed to other states.