assignment of a debt

Assignment Of Debt Agreement: Definition & Sample

Jump to section, what is an assignment of debt agreement.

An assignment of debt agreement is a legal document between a debtor and creditor that outlines the repayment terms. An assignment of debt agreement can be used as an alternative to bankruptcy, but several requirements must be met for it to work.

In addition, if obligations are not met under a debt agreement, it might still be necessary to file for bankruptcy later on. Therefore, consulting with an attorney specializing in debt agreements is always recommended before entering into one of these contracts.

Assignment Of Debt Agreement Sample

Reference : Security Exchange Commission - Edgar Database, EX-10 5 exhibit1024f10qsbmay04.htm EXHIBIT 10.24 , Viewed December 20, 2021, View Source on SEC .

Who Helps With Assignment Of Debt Agreements?

Lawyers with backgrounds working on assignment of debt agreements work with clients to help. Do you need help with an assignment of debt agreement?

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Meet some of our Assignment Of Debt Agreement Lawyers

International-savvy technology lawyer with 35years+ in Silicon Valley, Tokyo, Research Triangle, Silicon Forest. Outside & inside general counsel, legal infrastructure development, product exports, and domestic & international contracts for clients across North America, Europe, and Asia. Work with Founders to establish startup and continuous revenue, sourcing and partnering with investors to attract funding, define success strategy and direct high-performing teams, advising stakeholders and Boards of Directors to steer company growth.

David Alexander advises clients on complex real estate transactions, including the acquisition, disposition, construction, financing and leasing of shopping centers, office buildings and industrial buildings throughout the U.S. An experienced real estate attorney, David reviews, drafts and negotiates all manner of retail, office and industrial real estate agreements, including purchase and sale agreements, construction contracts, leases and financing documentation.

Managing partner at Patel & Almeida and has over 22 years of experience assisting clients in the areas of intellectual property. business, employment, and nonprofit law.

Tiffanie W.

Tiffanie Wilson is a business transactions and personal injury lawyer. She helps clients realize their business goals by expertly drafting contracts, providing sound legal advice, and working for justice for injured clients.

An experienced attorney with a varied range of legal abilities. Focusing on real estate transactions and general commercial litigation.

Doug has over 20 years of private and public company general counsel experience focusing his legal practice on commercial transactions including both software and biotech. He is a tech savvy, business savvy lawyer who is responsive and will attain relationship building outcomes with your counterparty while effectively managing key risks and accelerating revenue. He received his Juris Doctor from Boston University School of Law earning the Book Award in Professional Ethics and after graduation he taught legal writing there for a number of years. Prior to law school, Doug earned a M.A in Mathematics at the State University of New York at Stony Brook, and a B.S in Honors Mathematics at Purdue University. After law school, Doug joined Fish & Richardson, where his practice focused on licensing software, trademarks and biotech. While at Fish & Richardson Doug authored a book on software licensing published by the American Intellectual Property Lawyers Association. Later he joined as General Counsel at FTP Software and led an IPO as well as corporate development. Doug has broad experience with a broad range of commercial agreement drafting and negotiation including SaaS software and professional services, distribution and other channel agreements, joint venture and M&A. Doug continued his leadership, corporate governance and commercial transaction practice at Mercury Computers (NASDAQ:MRCY) leading corporate development. Doug’s experience ranges from enterprise software to biotech and other vertical markets. He joined the board of Deque Systems in 2009 and joined in an operating role as President in 2020 successfully scaling the software business.

I graduated from Georgetown Law in 2009 and have been practicing for fourteen years. I primarily work on commercial contracts. I specialize in drafting, reviewing, and negotiating MSAs for services companies, specializing in SaaS agreements. I have drafted online terms of service, acceptance use policies, and privacy policies for clients across a range of industries. In addition, I counsel clients on NDAs, non-solicitation/non-competition agreements, employment contracts, and commercial and residential leases. Prior to opening my own practice, I worked for four years at one of the most prestigious law firms in the world, an appellate litigation firm, the federal government, and one of the country's most renowned government contracts firms. I live in Boulder but represent clients nationwide. Although I have represented numerous Fortune 500 companies and the Defense Department, my passion is advising startups and small businesses. Like so many of my clients, I am an entrepreneur and have owned and operated three businesses (my law firm and two companies outside the legal field). I understand the needs and concerns of small business owners. I look forward to working with you.

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Assigning debts and other contractual claims - not as easy as first thought

Harking back to law school, we had a thirst for new black letter law. Section 136 of the Law of the Property Act 1925 kindly obliged. This lays down the conditions which need to be satisfied for an effective legal assignment of a chose in action (such as a debt). We won’t bore you with the detail, but suffice to say that what’s important is that a legal assignment must be in writing and signed by the assignor, must be absolute (i.e. no conditions attached) and crucially that written notice of the assignment must be given to the debtor.

When assigning debts, it’s worth remembering that you can’t legally assign part of a debt – any attempt to do so will take effect as an equitable assignment. The main practical difference between a legal and an equitable assignment is that the assignor will need to be joined in any legal proceedings in relation to the assigned debt (e.g. an attempt to recover that part of the debt).

Recent cases which tell another story

Why bother telling you the above?  Aside from our delight in remembering the joys of debating the merits of legal and equitable assignments (ehem), it’s worth revisiting our textbooks in the context of three recent cases. Although at first blush the statutory conditions for a legal assignment seem quite straightforward, attempts to assign contractual claims such as debts continue to throw up legal disputes:

• In  Sumitomo Mitsui Banking Corp Europe Ltd v Euler Hermes Europe SA (NV) [2019] EWHC 2250 (Comm),  the High Court held that a performance bond issued under a construction contract was not effectively assigned despite the surety acknowledging a notice of assignment of the bond. Sadly, the notice of assignment failed to meet the requirements under the bond instrument that the assignee confirm its acceptance of a provision in the bond that required the employer to repay the surety in the event of an overpayment. This case highlights the importance of ensuring any purported assignment meets any conditions stipulated in the underlying documents.
• In  Promontoria (Henrico) Ltd v Melton [2019] EWHC 2243 (Ch) (26 June 2019) , the High Court held that an assignment of a facility agreement and legal charges was valid, even though the debt assigned had to be identified by considering external evidence. The deed of assignment in question listed the assets subject to assignment, but was illegible to the extent that the debtor’s name could not be deciphered. The court got comfortable that there had been an effective assignment, given the following factors: (i) the lender had notified the borrower of its intention to assign the loan to the assignee; (ii) following the assignment, the lender had made no demand for repayment; (iii) a manager of the assignee had given a statement that the loan had been assigned and the borrower had accepted in evidence that he was aware of the assignment. Fortunately for the assignee, a second notice of assignment - which was invalid because it contained an incorrect date of assignment - did not invalidate the earlier assignment, which was found to be effective. The court took a practical and commercial view of the circumstances, although we recommend ensuring that your assignment documents clearly reflect what the parties intend!
• Finally, in Nicoll v Promontoria (Ram 2) Ltd [2019] EWHC 2410 (Ch),  the High Court held that a notice of assignment of a debt given to a debtor was valid, even though the effective date of assignment stated in the notice could not be verified by the debtor. The case concerned a debt assigned by the Co-op Bank to Promontoria and a joint notice given by assignor and assignee to the debtor that the debt had been assigned “on and with effect from 29 July 2016”. A subsequent statutory demand served by Promontoria on the debtor for the outstanding sums was disputed on the basis that the notice of assignment was invalid because it contained an incorrect date of assignment. Whilst accepting that the documentation was incapable of verifying with certainty the date of assignment, the Court held that the joint notice clearly showed that both parties had agreed that an assignment had taken place and was valid. This decision suggests that mistakes as to the date of assignment in a notice of assignment may not necessarily be fatal, if it is otherwise clear that the debt has been assigned.

The conclusion from the above? Maybe it’s not quite as easy as first thought to get an assignment right. Make sure you follow all of the conditions for a legal assignment according to the underlying contract and ensure your assignment documentation is clear.

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Debt Assignment and Assumption Agreement

A Debt Assignment and Assumption Agreement is a very simple document whereby one party assigns their debt to another party, and the other party agrees to take that debt on. The party that is assigning the debt is the original debtor; they are called the assignor. The party that is assuming the debt is the new debtor; they are called the assignee.

The debt is owed to a creditor.

This document is different than a Debt Settlement Agreement , because there, the original debtor has paid back all of the debt and is now free and clear. Here, the debt still stands, but it will just be owed to the creditor by another party.

This is also different than a Debt Acknowledgment Form , because there, the original debtor is simply signing a document acknowledging their debt.

How to use this document

This document is extremely short and to-the-point. It contains just the identities of the parties, the terms of the debt, the debt amount, and the signatures. It is auto-populated with some important contract terms to make this a complete agreement.

When this document is filled out, it should be printed, signed by the assignor and the creditor, and then signed by the assignee in front of a notary. It is important to have the assignee's signature notarized, because that is the party that is taking on the debt.

Applicable law

Debt Assignment and Assumption Agreements are generally covered by the state law where the debt was originally incurred.

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Debt Assignment and Assumption Agreement - FREE

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• How Does Debt Assignment Work?

Chloe Meltzer | December 07, 2023

Legal Expert Chloe Meltzer, MA

Chloe Meltzer is an experienced content writer specializing in legal content creation. She holds a degree in English Literature from Arizona State University, complemented by a Master’s in Marketing from California Polytechnic State University-San Luis Obispo.

Edited by Hannah Locklear

Editor at SoloSuit Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Summary: What are your options when your debt has been assigned to a debt collector? Find out why a creditor might have assigned your debt and how to deal with it.

Debt assignment refers to a transfer of debt. This includes all of the associated rights and obligations, as it goes from a creditor to a third party. Debt assignment is essentially the legal transfer of debt to a debt collector (or debt collection agency). After this agency purchases the debt, they will have the responsibility to collect the debt, meaning you will pay your debt to them.

File a response with SoloSuit to win against debt collectors.

Find Out How Debt Assignment Works

When a creditor or lender no longer wants to be responsible for attempting to collect your debt, they will sell your debt to a third party. When this occurs, a Notice of Assignment (NOA) is sent out to you. This should inform you of who is responsible for collecting the rest of your loan or debt.

Legally you must be notified if your debt is assigned to someone new. This is to ensure that you know where to make payments to. If you are not aware of the new assignment, you may send payments to the wrong location which could force you into unintentional default.

Know How the FDCPA Protects You

Third-party debt collectors must act according to the Fair Debt Collection Practices Act (FDCPA). This federal law restricts the methods by which a debt collector can contact you, and attempt to collect debts. The FDCPA regulates the time of day or night a collector can make contact, how often they can call, as well as what they say and how they say it.

If you believe that a debt collector has violated the FDCPA, then you may be able to file a suit against that company. You may also be able to sue for damages or attorney fees.

Stand up to debt collection agencies with SoloSuit.

Learn Why a Creditor Assigns Debt

There are a few reasons why a creditor may assign your debt. Typically, the most common reason is to reduce their risk. By assigning and selling the debt it is no longer their liability. They can ensure they recoup some of their money, and appease investors as well.

Discover How Purchasing a Debt Differs from Debt Assignment

The purchase of debt occurs before assignment. Before the assignment of delinquent debt, a collection agency will be required to purchase it. This is often done at a far lower price, while they still attempt to recoup the entire debt. Because of this, it allows you to attempt to settle your debt for less.

Understand Why Debt Assignment Is Often Criticized

The process of assigning debt is often seen as unethical. With threats, harassment, and lies of all kinds, many debt buyers have been accused of violating the FDCPA. Because of this, debt assignment has seen a good amount of criticism. Some cases have even seen consumers charged with debts that have already been settled or paid .

Nevertheless, this shows how important it is to be on top of your debts. The number one choice you should make with any debt or debt assignment is to respond to all correspondence. This will ensure that you stay in compliance, and act when you need to.

What is SoloSuit?

SoloSuit makes it easy to respond to a debt collection lawsuit.

How it works: SoloSuit is a step-by-step web-app that asks you all the necessary questions to complete your answer. Upon completion, you can either print the completed forms and mail in the hard copies to the courts or you can pay SoloSuit to file it for you and to have an attorney review the document.

Respond with SoloSuit

"First time getting sued by a debt collector and I was searching all over YouTube and ran across SoloSuit, so I decided to buy their services with their attorney reviewed documentation which cost extra but it was well worth it! SoloSuit sent the documentation to the parties and to the court which saved me time from having to go to court and in a few weeks the case got dismissed!" – James

>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate

>>Read the NPR story on SoloSuit: A Student Solution To Give Utah Debtors A Fighting Chance

How to Answer a Summons for debt collection in all 50 states

Here's a list of guides on how to respond to a debt collection lawsuit in each state:

The Ultimate 50 State Guide

• Connecticut
• Massachusetts
• Mississippi
• New Hampshire
• North Carolina
• North Dakota
• Pennsylvania
• Rhode Island
• South Carolina
• South Dakota
• Vermont ; Vermont (Small Claims court)
• West Virginia

Guides on how to resolve debt with every debt collector

Are you being sued by a debt collector? We’re making guides on how to resolve debt with each one.

• 11 Charter Communications
• AAA Collections
• Aargon Agency Inc
• Absolute Resolutions Investments LLC
• ACEI Collections
• Account Services
• Accredited Collection Services
• Advanced Recovery Systems
• AFNI Collections
• Alco Capital Group LLC
• Aldous and Associates
• Alliance Collections
• Alliance One
• Alliant Capital Management
• Alpha Recovery Corp
• Alltran Financial
• Alltran Health
• Alorica Inc.
• Amcol Clmbia in Court
• American Coradius International
• American Profit Recovery
• American Recovery Service
• Americollect
• AmSher Collection Services
• Apelles LLC
• AR Resources
• ARC Collections
• ARM Solutions
• Arrow Financial Services
• ARS National Services
• ARSC Debt Collectors
• AscensionPoint Recovery Services
• Asset Acceptance LLC
• Asset Recovery Solutions
• Associated Credit Services
• Atlantic Credit and Finance
• Atradius Collections
• Automated Collection Services, Inc.
• Autovest LLC
• AWA Collections
• Balekian Hayes
• Bay Area Receivables
• BCA Financial Services
• BC Services
• Benuck and Rainey
• Berlin-Wheeler
• Bluebonnet Financial LLC
• Bonneville Collections
• Bull City Financial
• Bureaus Investment Group
• Caine and Weiner
• Capio Partners
• Capital Accounts
• Capital Collections
• Capital Management Services
• Carmel Financial/New Coast Direct
• Cavalry SPV I LLC
• CBCS Collections
• CBV Collections
• CCB Credit Services
• CCS Collections
• CCS Offices
• Central Mediation Services
• Central Portfolio Control
• Cerastes LLC
• Choice Recovery
• Choice Recovery Inc
• CKS Financial
• CKMS Financial
• Client Services
• CMRE Financial Services
• Coast Professional
• Comenity Bank Debt Collection
• Commonwealth Financial
• ConServe Debt Collection
• Consumer Collection Management
• Contract Callers Inc
• Convergent Healthcare Recoveries
• Convergent Outsourcing
• Couch Conville & Blitt
• Covington Credit
• Credco in Court
• Credence Resource Management
• Credit Bureau Systems
• Credit Control Corporation
• Credit Management Company
• Credit Management LP
• Credit Systems
• CTC Debt Collector
• CVCS Debt Collection
• Cypress Financial Recoveries
• D&A Services
• Daniels, Norelli, Cecere & Tavel P.C.
• DCM Services
• Debt Recovery Solutions
• Delanor Kemper & Associates
• Department Stores National Bank
• Direct Recovery Associates
• Discover Collections
• Diversified Adjustment
• Diversified Consultants
• Diversified Recovery Bureau
• DNF Associates, LLC
• Dynamic Collectors
• Eagle Accounts Group, Inc.
• Eastern Account System
• Ellington and Associates Collections
• Encore Capital Group
• Enerson Law
• Enerson Law LLC
• Enhanced Recovery Company
• ERC Collections
• ERSolutions
• Estate Information Services
• Equable Ascent Financial
• Everest Business Funding
• Executive Credit Management
• Faber and Brand
• Factual Data
• Falls Collection Service
• FCO Collections and Outsourcing
• FIA Card Services
• fin rec svc (Financial Recovery Services)
• First Federal Credit Credit Control
• First Financial Bank
• First Portfolio Ventures LLC
• First Progress
• FirstPoint Collection Resources
• Firstsource Advantage
• FMA Alliance
• Forster & Garbus
• Franklin Collection Services
• Freedom Plus
• Freshview Solutions
• Frontline Asset
• Frost Arnett
• Fulton Friedman & Gullace LLP
• Galaxy International Purchasing, LLC
• GC Debt Collection
• GC Services
• General Revenue Corporation
• GLA Collections
• Glass Mountain Capital
• Glasser and Glasser
• Global Credit Collection Corp
• Global Trust Management
• GMAC Financing
• Golden 1 Credit Union
• Grant and Weber
• Grant Mercantile Agency
• Gulf Coast Collection Bureau
• Halsted Financial Services
• Harris and Harris
• Harvard Collection
• Harvest Credit Management
• Helvey and Associates
• Hollis Cobb
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• Hosto Buchan
• Howard Lee Schiff
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• Hudson & Keyse LLC?
• Hunter Warfield
• Impact Receivables Management
• Innovative Recovery
• Integras Capital Recovery LLC
• Javitch Block
• JHPDE Finance 1 LLC
• JP Receivables Management Partners
• Kenneth Eisen and Associates
• KeyBank student loans
• Kirschenbaum, Phillips & Levy P.C.
• KLS Financial Services
• Kramer & Frank
• Lakeside Collection
• Lending Club
• Lincoln and Morgan Kabbage
• Linebarger Goggan Blair & Sampson LLP
• Lockhart Collection Agency
• LJ Ross Associates
• LTD Collections
• Malcolm S. Gerald and Associates
• Malen & Associates
• Mandarich Law Group
• Mannbracken
• Marcam Associates
• MARS Inc. Collections
• MCA Management Company
• McCarthy, Burgess & Wolff
• Meade & Associates
• Mercantile Adjustment Bureau
• Merchants Credit Association
• MGM Collections
• Michael J Adams PC
• Midland Funding LLC
• Mid-South Adjustment
• Monarch Recovery
• Monterey Financial
• Moss Law Firm
• Mountain Land Collections
• MRS Associates
• MSW Capital LLC
• Mullooly, Jeffrey, Rooney & Flynn
• Nathan and Nathan PC
• National Collegiate Trust
• National Credit Adjusters
• National Credit Care
• National Credit Systems
• National Enterprise Systems
• National Recovery Agency
• National Recovery Solutions
• Nationwide Credit
• Nationwide Recovery Services
• Nationwide Recovery Systems
• NCO Financial Systems Incorporated
• North American Recovery
• Northland Group
• Northstar Capital Acquisition
• Northstar Location Services
• NRC Collection Agency
• Oliver Adjustment Company
• Oliphant Financial, LLC
• P&B Capital Group
• PCB Collections Agency
• Palisades Collection LLC
• Pallida LLC
• Paragon Contracting Services
• Paragon Revenue Group
• Payday Loan Debt Collectors
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• Penn Credit
• Perdue Brandon
• Persolve LLC
• Phillips & Cohen Associates
• Phoenix Financial Services
• Pioneer Credit Recovery
• PRA Group, Inc.
• Pressler, Felt & Warshaw LLP
• Prestige Services, Inc.
• Prince Parker and Associates
• Professional Finance Company
• Progressive Management Systems
• Provest Law
• Quaternary Collection Agency
• RAB Collection Agency
• Rash Curtis and Associates
• Radius Global SOL
• Radius Global Solutions
• Rawlings Company
• Razor Capital
• Real Time Resolutions
• Receivables Performance Management
• Regents and Associates
• Reliant Capital Solutions
• Resurgent Capital Services and LVNV Funding
• Revco Solutions
• Revenue Enterprises LLC
• Revenue Group
• RGS Financial, Inc.
• RMP LLC in Court
• RMP Services
• RS Clark and Associates
• RTR Financial Services
• Rubin & Rothman
• Salander Enterprises LLC
• Samara Portfolio Management
• SCA Collections
• Scott Parnell and Associates
• Second Round Collections
• Second Round Sub LLC
• Selip & Stylianou LLP
• Sequium Asset Solutions
• Sessoms and Rogers
• Sherman Acquisition
• Sherman Financial Group
• SIMM Associates
• Source Receivables Management
• Southern Management Systems
• Southwest Credit Group
• Spire Recovery Solutions
• SRS Company
• Stark Collection Agency
• State Collection Service
• Stenger and Stenger
• Stillman Law Office
• Summit Account Resolution
• Sunrise Credit Services
• Superlative RM Debt Collector
• Suttell and Hammer
• Synergetic Communication
• Synerprise Consulting
• The Law Office of Michael J Scott
• Trellis Company
• Troy Capital
• TRS Recovery Services
• Tulsa Teachers Credit Union
• UCB Collection
• Unifin Debt Collector
• Universal Credit Services
• US Bank Collections
• USAA collections
• USCB America
• Valentine and Kebartas
• Valley Servicing
• Vance & Huffman LLC
• Van Ru Credit Corporation
• Velo Law Office
• Velocity Investments
• Viking Client Services
• Wakefield and Associates
• Waypoint Resource Group
• Weinberg and Associates
• Weltman, Weinberg & Reis
• Westwood Funding
• Williams and Fudge
• Wilshire Consumer Credit
• Wolpoff & Abramson
• Worldwide Asset Purchasing
• www.AutomotiveCredit.com
• Zarzaur & Schwartz
• Zwicker & Associates

Resolve your debt with your creditor

Some creditors, banks, and lenders have an internal collections department. If they come after you for a debt, Solosuit can still help you respond and resolve the debt. Here’s a list of guides on how to resolve debt with different creditors.

• American Express ; American Express – Debt Collection
• Bank of America
• Best Buy Credit Card
• Capital One
• Credit One Bank
• Old Navy Credit Card
• PayPal Synchrony Card
• Regional Finance
• Retailers National Bank
• Reunion Student Loan Finance Corporation
• SYNCB/PPEXTR
• Synchrony Bank
• Synchrony Walmart Card
• Target National Bank
• Wells Fargo
• Can I Pay My Original Creditor Instead of a Debt Collection Agency?
• Can I Settle a Debt with the Original Creditor?

Settle your medical debt

Having a health challenge is stressful, but dealing medical debt on top of it is overwhelming. Here are some resources on how to manage medical debt.

• Am I Responsible for My Spouse's Medical Debt?
• Do I Need a Lawyer for Medical Bills?
• Do I Need a Lawyer to Fight Medical Bill Debt?
• Does Bankruptcy Clear Medical Debt?
• How Much Do Collection Agencies Pay for Medical Debt?
• How to Find Medical Debt Forgiveness Programs
• Is There a Statute of Limitations on Medical Bills?
• Medical Debt Statute of Limitations by State
• Summoned to Court for Medical Bills — What Do I Do?
• Summoned to Court for Medical Bills? What to Do Next

Guides on arbitration

If the thought of going to court stresses you out, you’re not alone. Many Americans who are sued for credit card debt utilize a Motion to Compel Arbitration to push their case out of court and into arbitration.

Below are some resources on how to use an arbitration clause to your advantage and win a debt lawsuit.

• How Arbitration Works
• How to Find an Arbitration Clause in Your Credit Agreement
• How to Make a Motion to Compel Arbitration
• How to Make a Motion to Compel Arbitration in Florida
• How to Make a Motion to Compel Arbitration Without an Attorney
• How Credit Card Arbitration Works
• Sample Motion to Compel Arbitration

Stop calls from debt collectors

Do you keep getting calls from an unknown number, only to realize that it’s a debt collector on the other line? If you’ve been called by any of the following numbers, chances are you have collectors coming after you, and we’ll tell you how to stop them.

• 1-800-390-7584
• 800-289-8004
• 800-955-6600
• 877-366-0169
• 877-591-0747
• 800-278-2420
• 800-604-0064
• 800-846-6406
• 877-317-0948
• 888-899-4332
• 888-912-7925
• 202-367-9070
• 502-267-7522

Federal debt collection laws can protect you

Knowing your rights makes it easier to stand up for your rights. Below, we’ve compiled all our articles on federal debt collection laws that protect you from unfair practices.

• 15 USC 1692 Explained
• Does the Fair Credit Reporting Act Work in Florida?
• FDCPA Violations List
• How to File an FDCPA Complaint Against Your Debt Collector (Ultimate Guide)
• How to Make a Fair Debt Collection Practices Act Demand Letter
• How to Submit a Transunion Dispute
• How to Submit an Equifax Dispute
• How to Submit an Experian Dispute
• What Debt Collectors Cannot Do — FDCPA Explained
• What Does Account Information Disputed by Consumer Meets FCRA Requirements Mean?
• What does “meets FCRA requirements” mean?
• What does FCRA stand for?
• What is the Consumer Credit Protection Act

Get debt relief in your state

We’ve created a specialized guide on how to find debt relief in all 50 states, complete with steps to take to find relief, state-specific resources, and more.

Debt collection laws in all 50 states

Debt collection laws vary by state, so we have compiled a guide to each state’s debt collection laws to make it easier for you to stand up for your rights—no matter where you live.

• Debt Collection Laws in Alabama
• Debt Collection Laws in Alaska
• Debt Collection Laws in Arizona
• Debt Collection Laws in Arkansas
• Debt Collection Laws in California
• Debt Collection Laws in Colorado
• Debt Collection Laws in Connecticut
• Debt Collection Laws in Delaware
• Debt Collection Laws in Florida
• Debt Collection Laws in Georgia
• Debt Collection Laws in Hawaii
• Debt Collection Laws in Kansas
• Debt Collection Laws in Idaho
• Debt Collection Laws in Illinois
• Debt Collection Laws in Indiana
• Debt Collection Laws in Iowa
• Debt Collection Laws in Kentucky
• Debt Collection Laws in Louisiana
• Debt Collection Laws in Massachusetts
• Debt Collection Laws in Michigan
• Debt Collection Laws in Minnesota
• Debt Collection Laws in Mississippi
• Debt Collection Laws in Missouri
• Debt Collection Laws in Montana
• Debt Collection Laws in Nebraska
• Debt Collection Laws in Nevada
• Debt Collection Laws in New Hampshire
• Debt Collection Laws in New Jersey
• Debt Collection Laws in New Mexico
• Debt Collection Laws in New York
• Debt Collection Laws in North Carolina
• Debt Collection Laws in North Dakota
• Debt Collection Laws in Ohio
• Debt Collection Laws in Oklahoma
• Debt Collection Laws in Oregon
• Debt Collection Laws in Pennsylvania
• Debt Collection Laws in Rhode Island
• Debt Collection Laws in South Carolina
• Debt Collection Laws in South Dakota
• Debt Collection Laws in Tennessee
• Debt Collection Laws in Texas
• Debt Collection Laws in Vermont
• Debt Collection Laws in Virginia
• Debt Collection Laws in Washington
• Debt Collection Laws in West Virginia
• Debt Collection Laws in Wisconsin
• Debt Collection Laws in Wyoming

Statute of limitations on debt state guides

Like all debt collection laws, the statute of limitations on debt varies by state. So, we wrote a guide on each state’s statutes. Check it out below.

Statute of Limitations on Debt Collection by State (Best Guide)

• Statute of Limitations on Debt Collection in Alabama
• Statute of Limitations on Debt Collection in Alaska
• Statute of Limitations on Debt Collection in Arizona
• Statute of Limitations on Debt Collection in Arkansas
• Statute of Limitations on Debt Collection in California
• Statute of Limitations on Debt Collection in Connecticut
• Statute of Limitations on Debt Collection in Colorado
• Statute of Limitations on Debt Collection in Delaware
• Statute of Limitations on Debt Collection in Florida
• Statute of Limitations on Debt Collection in Georgia
• Statute of Limitations on Debt Collection in Hawaii
• Statute of Limitations on Debt Collection in Illinois
• Statute of Limitations on Debt Collection in Indiana
• Statute of Limitations on Debt Collection in Iowa
• Statute of Limitations on Debt Collection in Kansas
• Statute of Limitations on Debt Collection in Louisiana
• Statute of Limitations on Debt Collection in Maine
• Statute of Limitations on Debt Collection in Maryland
• Statute of Limitations on Debt Collection in Michigan
• Statute of Limitations on Debt Collection in Minnesota
• Statute of Limitations on Debt Collection in Mississippi
• Statute of Limitations on Debt Collection in Missouri
• Statute of Limitations on Debt Collection in Montana
• Statute of Limitations on Debt Collection in Nebraska
• Statute of Limitations on Debt Collection in Nevada
• Statute of Limitations on Debt Collection in New Hampshire
• Statute of Limitations on Debt Collection in New Jersey
• Statute of Limitations on Debt Collection in New Mexico
• Statute of Limitations on Debt Collection in New York
• Statute of Limitations on Debt Collection in North Carolina
• Statute of Limitations on Debt Collection in North Dakota
• Statute of Limitations on Debt Collection in Oklahoma
• Statute of Limitations on Debt Collection in Oregon
• Statute of Limitations on Debt Collection in Oregon (Complete Guide)
• Statute of Limitations on Debt Collection in Pennsylvania
• Statute of Limitations on Debt Collection in Rhode Island
• Statute of Limitations on Debt Collection in South Carolina
• Statute of Limitations on Debt Collection in South Dakota
• Statute of Limitations on Debt Collection in Tennessee
• Statute of Limitations on Debt Collection in Texas
• Statute of Limitations on Debt Collection in Utah
• Statute of Limitations on Debt Collection in Vermont
• Statute of Limitations on Debt Collection in Virginia
• Statute of Limitations on Debt Collection in Washington
• Statute of Limitations on Debt Collection in West Virginia
• Statute of Limitations on Debt Collection in Wisconsin
• Statute of Limitations on Debt Collection in Wyoming

Check the status of your court case

Don’t have time to go to your local courthouse to check the status of your case? We’ve created a guide on how to check the status of your case in every state, complete with online search tools and court directories.

• Alabama Court Case Search—Find Your Lawsuit
• Alaska Court Case Search — Find Your Lawsuit
• Arizona Court Case Search - Find Your Lawsuit
• Arkansas Court Case Search — Find Your Lawsuit
• California Court Case Search- Find Your Lawsuit
• Colorado Court Case Search — Find Your Lawsuit
• Connecticut Case Lookup — Find Your Court Case
• Delaware Court Case Search — Find Your Lawsuit
• Florida Court Case Search — Find Your Lawsuit
• Georgia Court Case Search — Find Your Lawsuit
• Hawaii Court Case Search — Find Your Lawsuit
• Idaho Court Case Search – Find Your Lawsuit
• Illinois Court Case Search — Find Your Lawsuit
• Indiana Court Case Search — Find Your Lawsuit
• Iowa Court Case Search — Find Your Lawsuit
• Kansas Court Case Search — Find Your Lawsuit
• Kentucky Court Case Search — Find Your Lawsuit
• Louisiana Court Case Search — Find Your Lawsuit
• Maine Court Case Search — Find Your Lawsuit
• Maryland Court Case Search — Find Your Lawsuit
• Massachusetts Court Case Search — Find Your Lawsuit
• Michigan Court Case Search — Find Your Lawsuit
• Minnesota Court Case Search — Find Your Lawsuit
• Mississippi Court Case Search — Find Your Lawsuit
• Missouri Court Case Search — Find Your Lawsuit
• Montana Court Case Search — Find Your Lawsuit
• Nebraska Court Case Search — Find Your Lawsuit
• Nevada Court Case Search — Find Your Lawsuit
• New Hampshire Court Case Search — Find Your Lawsuit
• New Jersey Court Case Search—Find Your Lawsuit
• New Mexico Court Case Search - Find Your Lawsuit
• New York Case Search — Find Your Lawsuit
• North Carolina Court Case Search — Find Your Lawsuit
• North Dakota Court Case Search �� Find Your Lawsuit
• Ohio Court Case Search — Find Your Lawsuit
• Oklahoma Court Case Search — Find Your Lawsuit
• Oregon Court Case Search — Find Your Lawsuit
• Pennsylvania Court Case Search — Find Your Lawsuit
• Rhode Island Court Case Search — Find Your Lawsuit
• South Carolina Court Case Search — Find Your Lawsuit
• South Dakota Court Case Search — Find Your Lawsuit
• Tennessee Court Case Search — Find Your Lawsuit
• Texas Court Case Search — Find Your Lawsuit
• Utah Court Case Search — Find Your Lawsuit
• Vermont Court Case Search — Find Your Lawsuit
• Virginia Court Case Search — Find Your Lawsuit
• Washington Court Case Search — Find Your Lawsuit
• West Virginia Court Case Search — Find Your Lawsuit
• Wisconsin Court Case Search — Find Your Lawsuit
• Wyoming Court Case Search — Find Your Lawsuit

How to stop wage garnishment in your state

Forgot to respond to your debt lawsuit? The judge may have ordered a default judgment against you, and with a default judgment, debt collectors can garnish your wages. Here are our guides on how to stop wage garnishment in all 50 states.

• Stop Wage Garnishment in Alabama
• Stop Wage Garnishment in Alaska
• Stop Wage Garnishment in Arizona
• Stop Wage Garnishment in Arkansas
• Stop Wage Garnishment in California
• Stop Wage Garnishment in Colorado
• Stop Wage Garnishment in Connecticut
• Stop Wage Garnishment in Delaware
• Stop Wage Garnishment in Florida
• Stop Wage Garnishment in Georgia
• Stop Wage Garnishment in Hawaii
• Stop Wage Garnishment in Idaho
• Stop Wage Garnishment in Illinois
• Stop Wage Garnishment in Indiana
• Stop Wage Garnishment in Iowa
• Stop Wage Garnishment in Kansas
• Stop Wage Garnishment in Kentucky
• Stop Wage Garnishment in Louisiana
• Stop Wage Garnishment in Maine
• Stop Wage Garnishment in Maryland
• Stop Wage Garnishment in Massachusetts
• Stop Wage Garnishment in Michigan
• Stop Wage Garnishment in Minnesota
• Stop Wage Garnishment in Mississippi
• Stop Wage Garnishment in Missouri
• Stop Wage Garnishment in Montana
• Stop Wage Garnishment in Nevada
• Stop Wage Garnishment in New Hampshire
• Stop Wage Garnishment in New Jersey
• Stop Wage Garnishment in New Mexico
• Stop Wage Garnishment in New York
• Stop Wage Garnishment in North Carolina
• Stop Wage Garnishment in North Dakota
• Stop Wage Garnishment in Ohio
• Stop Wage Garnishment in Oklahoma
• Stop Wage Garnishment in Oregon
• Stop Wage Garnishment in Pennsylvania
• Stop Wage Garnishment in Rhode Island
• Stop Wage Garnishment in South Carolina
• Stop Wage Garnishment in South Dakota
• Stop Wage Garnishment in Tennessee
• Stop Wage Garnishment In Texas
• Stop Wage Garnishment In Utah
• Stop Wage Garnishment in Vermont
• Stop Wage Garnishment in Virginia
• Stop Wage Garnishment in Washington
• Stop Wage Garnishment in West Virginia
• Stop Wage Garnishment in Wisconsin
• Stop Wage Garnishment in Wyoming

Other wage garnishment resources

• Bank Account Garnishment and Liens in Texas
• Can I Stop Wage Garnishment?
• Can My Wife's Bank Account Be Garnished for My Debt?
• Can Payday Loans Garnish Your Wages?
• Can pensions be garnished?
• Can Private Disability Payments Be Garnished?
• Can Social Security Disability Be Garnished?
• Can They Garnish Your Wages for Credit Card Debt?
• Can You Stop a Garnishment Once It Starts?
• Guide to Garnishment Limits by State
• How Can I Stop Wage Garnishments Immediately?
• How Long Before a Creditor Can Garnish Wages?
• How Long Does It Take to Get Garnished Wages Back?
• How to Fight a Wage Garnishment
• How to Prevent Wage Garnishment
• How to Stop a Garnishment
• How to Stop Social Security Wage Garnishment
• How to Stop Wage Garnishment — Everything You Need to Know
• New York Garnishment Laws – Overview
• Ohio Garnishment Laws — What They Say
• Wage Garnishment Lawyer
• What Is Wage Garnishment?

How to settle a debt in your state

Debt settlement is one of the most effective ways to resolve a debt and save money. We’ve created a guide on how to settle your debt in all 50 states. Find out how to settle in your state with a simple click and explore other debt settlement resources below.

• How to Settle a Debt in Alabama
• How to Settle a Debt in Alaska
• How to Settle a Debt in Arizona
• How to Settle a Debt in Arkansas
• How to Settle a Debt in California
• How to Settle a Debt in Colorado
• How to Settle a Debt in Delaware
• How to Settle a Debt in Florida
• How to Settle a Debt in Hawaii
• How to Settle a Debt in Idaho
• How to Settle a Debt in Illinois
• How to Settle a Debt in Indiana
• How to Settle a Debt in Iowa
• How to Settle a Debt in Kansas
• How to Settle a Debt in Kentucky
• How to Settle a Debt in Louisiana
• How to Settle a Debt in Maryland
• How to Settle a Debt in Massachusetts
• How to Settle a Debt in Michigan
• How to Settle a Debt in Minnesota
• How to Settle a Debt in Mississippi
• How to Settle a Debt in Missouri
• How to Settle a Debt in Montana
• How to Settle a Debt in Nebraska
• How to Settle a Debt in Nevada
• How to Settle a Debt in New Hampshire
• How to Settle a Debt in New Jersey
• How to Settle a Debt in New Mexico
• How to Settle a Debt in New York
• How to Settle a Debt in North Carolina
• How to Settle a Debt in North Dakota
• How to Settle a Debt in Ohio
• How to Settle a Debt in Oklahoma
• How to Settle a Debt in Oregon
• How to Settle a Debt in Pennsylvania
• How to Settle a Debt in South Carolina
• How to Settle a Debt in South Dakota
• How to Settle a Debt in Tennessee
• How to Settle a Debt in Texas
• How to Settle a Debt in Utah
• How to Settle a Debt in Vermont
• How to Settle a Debt in Virginia
• How to Settle a Debt in West Virginia
• How to Settle a Debt in Wisconsin
• How to Settle a Debt in Wyoming

How to settle with every debt collector

Not sure how to negotiate a debt settlement with a debt collector? We are creating guides to help you know how to start the settlement conversation and increase your chances of coming to an agreement with every debt collector.

• American Express
• Capitol One
• Cavalry SPV
• Midland Funding
• Moore Law Group
• Navy Federal
• NCB Management Services
• Portfolio Recovery

Other debt settlement resources

• Best Debt Settlement Companies
• Can I Settle a Debt After Being Served?
• Can I Still Settle a Debt After Being Served?
• Can You Settle a Warrant in Debt Before Court?
• Debt Management vs. Debt Settlement
• Debt Settlement Pros and Cons
• Debt Settlement Scam
• Do I Need to Hire a Debt Settlement Lawyer?
• Do You Need a Debt Settlement Attorney in Houston Texas?
• Do You Owe Taxes on Settled Debt?
• Here’s a Sample Letter to Collection Agencies to Settle Debt
• How Can I Settle My Credit Card Debt Before Going to Court?
• How Do I Know if a Debt Settlement Company Is Legitimate?
• How Long Does a Lawsuit Take to Settle?
• How Much Do Settlement Companies Charge?
• How I Settled My Credit Card Debt With Discover
• How to Make a Debt Settlement Agreement
• How to Make a Settlement Offer to Navient
• How to Negotiate a Debt Settlement with a Law Firm
• How to send Santander a settlement letter
• How to Settle Debt for Pennies on the Dollar
• How to Settle Debt in 3 Steps
• How to Settle Debt with a Reduced Lump Sum Payment
• How to Settle a Credit Card Debt Lawsuit — Ultimate Guide
• How to Settle Credit Card Debt When a Lawsuit Has Been Filed
• If You Are Using a Debt Relief Agency, Can You Settle Yourself with the Creditor?
• Largest Debt Settlement Companies
• Should I Settle a Collection or Pay in Full?
• Summary of the Equifax Data Breach Settlement
• The Advantages of Pre-Settlement Lawsuit Funding
• The FTC Regulates Debt Settlement Through the Telemarketing Sales Rule
• The Pros and Cons of Debt Settlement
• What Happens if I Reject a Settlement Offer?
• What Happens if You Don't Pay a Debt Settlement?
• What Happens When You Settle a Debt?
• What Is A Debt Settlement Agreement?
• What is Debt Settlement?
• What Percentage Should I Offer to Settle Debt?
• What to Ask for in a Settlement Agreement
• Who Qualifies for Debt Settlement?
• Will Collection Agencies Settle for Less?
• 5 Signs of a Debt Settlement Scam

Personal loan and debt relief reviews

We give a factual review of the following debt consolidation, debt settlement, and loan organizations and companies to help you make an informed decision before you take on a debt.

• Accredited Debt Relief Debt Settlement Reviews
• Advance America Loan Review
• ACE Cash Express Personal Loan Review
• BMG Money Loan Review
• BMO Harris Bank Review: Pros and Cons
• Brite Solutions Debt Settlement Reviews
• Caliber Home Loans Mortgage Review
• Cambridge Debt Consolidation Review
• Campus Debt Solutions Review
• CashNetUSA Review
• Century Debt Settlement Reviews
• ClearPoint Debt Management Review
• Click N Loan Reviews
• CuraDebt Debt Settlement Review
• CuraDebt Reviews: Debt Relief Assistance For California Residents
• Debt Eraser Review
• Debtconsolidation.com Debt Settlement Reviews
• Eagle One Debt Settlement Reviews
• Freedom Debt Relief Debt Settlement Reviews
• Global Holdings Debt Settlement Reviews
• Golden 1 Credit Union Personal Loan Review
• Honda Financial Services Review
• iLending Reviews
• Infinite Law Group Debt Settlement Reviews
• JG Wentworth Debt Settlement Reviews
• LoanMart Reviews
• Mastriani Law Firm Review
• Milestone ® Mastercard ® Review
• ModoLoan Review
• Money Management International Reviews
• M&T Mortgage Company Review
• National Debt Relief Debt Settlement Reviews
• New Era Debt Settlement Reviews
• OppLoans Review
• Pacific Debt Relief Reviews
• Palisade Legal Group Debt Settlement Reviews
• PCG Debt Consolidation Review
• PenFed Auto Loan Review
• Priority Plus Financial Reviews
• Roseland Associates Debt Consolidation Review
• SDCCU Debt Consolidation Review
• Speedy Cash Loans Review
• Symple Lending Reviews
• Tripoint Lending Reviews
• TurboDebt Debt Settlement Reviews
• Turnbull Law Group Debt Settlement Reviews
• United Debt Settlement Reviews
• Upgrade Auto Loans Reviews

How to repair and improve your credit score

Debt has a big impact on your credit. Below is a list of guides on how to repair and improve your credit, even while managing major debt.

• 3 Ways to Repair Your Credit with Debt Collections
• 5 Pros and Cons of Credit Cards & How to Use Them Wisely
• 6 Reasons Your Credit Score Isn't Going Up
• Bankruptcy vs Debt Settlement: Which is Better for Your Credit Score?
• Does Debt Consolidation Hurt Your Credit Score?
• Does Wage Garnishment Affect Credit?
• Guide to Disclosing Income on Your Credit Card Application
• How Long Does It Take to Improve My Credit Score After Debt Settlement?
• How Often Does Merrick Bank Increase Your Credit Limit?
• How to fix your credit to buy a house
• How to Handle Debt and Improve Credit
• How to Raise My Credit Score 40 Points Fast
• If I Settle with a Collection Agency, Will It Hurt My Credit?
• Is 600 a Good Credit Score?
• Obama Credit Card Debt Relief Program – How to Use It
• Sample credit report dispute letter
• Should I Use Credit Journey?
• Understanding myFICO: Your Gateway to Better Credit
• What Does "DLA" Mean on a Credit Report?
• What Is A Good Credit Score For Businesses?
• What is American Credit Acceptance?
• What is CBNA on my credit report?
• What is CreditFresh?
• Who Made the Credit Score?
• Why is THD/CBNA on my credit report?

How to resolve student loan debt

Struggling with student debt? SoloSuit’s got you covered. Below are resources on handling student loan debt.

• Budgeting Strategies for Students: How to Manage Your Finances Wisely
• Can You Go to Jail for Not Paying Student Loans?
• Can You Settle Student Loan Debt?
• Do Student Loans Go Away After 7 Years? (2022 Guide)
• Do You Need a Student Loan Lawyer? (Complete Guide)
• Does Student Debt Die With You?
• How to Manage a Student Debt
• How to Get Rid of Student Loan Debt
• Mandatory Forbearance Request Student Loan Debt Burden
• Negative Economic Effects of Student Loan Debt on the US Economy
• Pros and Cons of Taking a Student Loan
• Regional Adjustment Bureau Student Loans – How to Win
• The Real Impact of Student Debt: How Our Brains Handle It
• Why It's Important to Teach Students How to Manage Debt
• 5 Alternatives to Taking a Student Loan
• 5 Tips for Students: How to Create a Realistic and Effective Budget
• 7 College Financial Planning Tips for Students
• 7 Things to Consider When Taking a Student Loan
• 7 Tips to Manage Your Student Loans

Civil law legal definitions

You can represent yourself in court. Save yourself the time and cost of finding an attorney, and use the following resources to understand legal definitions better and how they may apply to your case.

• Accleration Clause — Definition
• Adjuster - Defined
• Adverse Action — Definition
• Affidavit — A Definition
• Annulment vs. divorce – what's the difference?
• Anticipatory Repudiation — Definition
• Bench Trial — Defined
• Certificate of Debt: A Definition
• Commuted Sentence – Definition
• Constructive Eviction - Defined
• Constructive Discharge - Definition
• Defendant - Definition and Everything You Need to Know
• Demurred – Definition
• Dischargeable - Definition
• Disclosures — Definition
• False Imprisonment Defined
• Good Faith Exception – Definition
• Hearsay — A Definition
• HOEPA – Definition
• Implied Contract – Definition
• Injunctive Relief — A Definition
• Intestate–Defined
• Irrevocable Agreement — Defined
• Joint Custody–Defined
• Litigator — A Definition
• Mediation - Definition
• Medical Malpractice — Definition
• Mistrial — A Definition
• Mitigating Circumstances — Definition
• Motion for Summary Judgment — Definition
• Nolle Prosequi – Definition
• Nunc Pro Tunc — A Definition
• Plaintiff - Definition and Everything You Need to Know
• Pro Se - Defined
• Probable Cause Hearing — Definition
• Restitution – Definition
• Sole Custody-Defined
• Statute of Limitations—Definition and Everything You Need to Know
• Summons—Definition
• Tenancy in Common – Defined
• Time Is of the Essence – Definition
• What Is the Bankruptcy Definition of Consumer Debt?
• Wrongful Termination–Defined

Get answers to these FAQs on debt collection

• Am I Responsible for My Husband's Debts If We Divorce?
• Am I Responsible for My Parent's Debt if I Have Power of Attorney?
• Can a Collection Agency Add Fees on the Debt?
• Can a Collection Agency Charge Interest on a Debt?
• Can a Credit Card Company Sue Me?
• Can a Debt Collector Freeze Your Bank Account?
• Can a Debt Collector Leave a Voicemail?
• Can a Debt Collector Take My Car in California?
• Can a Judgment Creditor Take my Car?
• Can a Process Server Leave a Summons Taped to My Door?
• Can an Eviction Be Reversed?
• Can Credit Card Companies Garnish Your Wages?
• Can Credit Cards Garnish Wages?
• Can Debt Collectors Call From Local Numbers?
• Can Debt Collectors Call You at Work in Texas?
• Can Debt Collectors Call Your Family?
• Can Debt Collectors Leave Voicemails?
• Can I Pay a Debt Before the Court Date?
• Can I Rent an Apartment if I Have Debt in Collection?
• Can I Sue the President for Emotional Distress?
• Can the SCRA Stop a Default Judgment?
• Can the Statute of Limitations be Extended?
• Can You Appeal a Default Judgement?
• Can You Get Unemployment if You Quit?
• Can You Go to Jail for a Payday Loan?
• Can You Go to Jail for Credit Card Debt?
• Can You Negotiate with Westlake Financial?
• Can You Record a Call with a Debt Collector in Your State?
• Can You Serve Someone with a Collections Lawsuit at Their Work?
• Can You Sue Someone Who Has Filed Chapter 7 Bankruptcy?
• Capital One is Suing Me – How Can I Win?
• Debt Snowball vs. Debt Avalanche: Which One Is Apt for You?
• Do 609 Letters Really Work?
• Do Debt Collectors Ever Give Up?
• Do I Have Too Much Debt to Divorce My Spouse?
• Do I Need a Debt Collection Defense Attorney?
• Do I Need a Debt Negotiator?
• Do I Need a Legal Coach?
• Do I Need a Payday Loans Lawyer?
• Does a Living Trust Protect Your Assets from Lawsuits?
• Does Chase Sue for Credit Card Debt?
• Does Debt Consolidation Have Risks?
• Does Midland Funding Show Up to Court?
• How Can I Get Financial Assistance in PA?
• How do Debt Relief Scams Work?
• How Do I Find Out If I Have Any Judgments Against Me?
• How Do I Get Rid of a Judgment Lien on My Property?
• How Do I Register on the Do Not Call List?
• How Does a Flex Loan Work?
• How Does Debt Affect Your Ability to Buy a Home?
• How Does Finwise Bank Work?
• How does Navy Credit debt forgiveness work?
• How Does Payments.tsico Work?
• How Important is it to Protect your Assets from Unexpected Events?
• How is Debt Divided in Divorce?
• How Long Do Creditors Have to Collect a Debt from an Estate?
• How long do debt collectors take to respond to debt validation letters?
• How Long Does a Judgement Last?
• How Long Does a Judgment Last?
• How Long Does a Levy Stay on a Bank Account?
• How Long Does an Eviction Stay on Your Record?
• How Many Calls from a Debt Collector is Considered Harassment?
• How Many Times Can a Judgment Be Renewed in North Carolina?
• How Many Times Can a Judgment be Renewed in Oklahoma?
• How Much Do Collection Agencies Pay for Debt?
• How Much Do You Have to Be in Debt to File Chapter 7?
• How Much Does College Actually Cost?
• How Often Do Credit Card Companies Sue for Non-Payment?
• How Should You Respond to the Theft of Your Identity?
• I am being sued because my identity was stolen - What do I do?
• If a Car is Repossessed Do I Still Owe the Debt?
• Is Debt Forgiveness Taxable?
• Is Freedom Debt Relief a Scam?
• Is it Legal for Debt Collectors to Call Family Members?
• Is it Smart to Consolidate Debt?
• Is LVNV Funding a Legitimate Company? - Them in Court
• Is My Case in the Right Venue?
• Is Portfolio Recovery Associates Legit? — How to Win
• Is Severance Pay Taxable?
• Is SoloSuit Worth It?
• Is Someone with Power of Attorney Responsible for Debt After Death?
• Is the NTB Credit Card Safe?
• Is There a Judgment Against Me Without my Knowledge?
• Is transworld systems legitimate? — How to win in court
• Liquidate–What Does it Mean?
• Litigation Finance: Is it a Good Investment?
• Received a 3-Day Eviction Notice? Here's What To Do
• Should I File Bankruptcy Before or After a Judgment?
• Should I Hire a Civil Litigation Attorney?
• Should I Hire a Civil Rights Lawyer?
• Should I Hire a Litigation Attorney?
• Should I Marry Someone With Debt?
• Should I Pay Off an Old Apartment Debt?
• Should I Send a Demand Letter Before a Lawsuit?
• Should I Use My IRA to Pay Off Credit Card Debt?
• Should You Communicate with a Debt Collector in Writing or by Telephone?
• Should You Invest in Stocks While In Debt?
• Subsidized vs. Unsubsidized Loans: Which is Better?
• The Truth: Should You Never Pay a Debt Collection Agency?
• What are the biggest debt collector companies in the US?
• What are the different types of debt?
• What Bank Is Behind Best Buy's Credit Card?
• What Bank Issues Kohl's Credit Card?
• What Bank Owns Old Navy Credit Card?
• What Credit Bureau does Aqua Finance Use?
• What Credit Bureau Does Truliant Use?
• What Does “Apple Pay Transaction Under Review” Mean?
• What Does a Debt Collector Have to Prove in Court?
• What Does BAC Stand For?
• What does HAFA stand for?
• What Does Payment Deferred Mean?
• What Does Reaffirmation of Debt Mean?
• What Happens After a Motion for Default Is Filed?
• What Happens at a Motion for Summary Judgment Hearing?
• What Happens If a Defendant Does Not Pay a Judgment?
• What Happens If a Process Server Can't Serve You?
• What Happens if a Tenant Wins an Eviction Lawsuit?
• What Happens If Someone Sues You and You Have No Money?
• What Happens If You Avoid Getting Served Court Papers?
• What Happens If You Don’t Pay Speedy Cash?
• What Happens If You Ignore a Debt Collector?
• What Happens If You Never Answer Debt Collectors?
• What Happens When a Debt Is Sold to a Collection Agency
• What Happens When a Debt Is Sold to a Collection Agency?
• What If a Summons Was Served to the Wrong Person?
• What If an Order for Default Was Entered?
• What if I default on an Avant payment?
• What If the Wrong Defendant Is Named in a Lawsuit?
• What Is a Case Number?
• What is a Certificate of Judgment in Ohio?
• What Is a Certificate of Service?
• What Is a Civil Chapter 61 Warrant?
• What is a Civil Litigation Lawyer?
• What Is a Consent Judgment?
• What Is a CPN Number?
• What Is a Debt Brokerage?
• What Is a Debt-to-Sales Ratio?
• What Is a Defamation Lawsuit?
• What is a default judgment?— What do I do?
• What Is a Libel Lawsuit?
• What is a Lien on a House?
• What is a Lien Release on a Car?
• What is a Lien?
• What Is a Motion to Strike?
• What Is a Motion to Suppress?
• What Is a Non-Dischargeable Debt in Tennessee?
• What Is a Nonsuit Without Prejudice?
• What Is a Preliminary Hearing?
• What Is a Reaffirmation Agreement?
• What Is a Request for Dismissal?
• What Is a Rule 3.740 Collections Defense in California?
• What Is a Slander Lawsuit?
• What is a Stipulated Judgment?
• What Is a Warrant in Debt?
• What is ABC Financial Club Charge?
• What is ACS Ed Services?
• What is Advanced Call Center Technologies?
• What is Alimony?
• What Is Allied Interstate's Phone Number?
• What is an Affirmative Defense?
• What Is an Assignment of Debt?
• What Is an Attorney Malpractice Lawsuit?
• What Is an Unlawful Detainer Lawsuit?
• What is Bank of America CashPro?
• What is Bitty Advance?
• What Is Celtic Bank?
• What is Consumer Portfolio Services?
• What Is Credence Resource Management?
• What Is Debt Internment?
• What Is Discover's 60/60 plan?
• What is Evading the Police?
• What Is Extinguishment of Debt?
• What is First Investors Financial Services?
• What is Global Lending Services?
• What is homicide?
• What Is Lexington Law Firm?
• What is LGFCU Personal Loan?
• What is Moral Turpitude?
• What is Online Information Services?
• What is Oportun?
• What Is Service of Process in Texas?
• What is sewer service?
• What Is Summary Judgment?
• What is Synchrony Bank's Hardship Program?
• What Is T-Mobile's Phone Number for Debt Collection?
• What Is the Amount of Money You Still Owe to Their Credit Card Company Called?
• What is the Deadline for a Defendant's Answer to Avoid a Default Judgment?
• What Is the Formula for Calculating Closing Costs?
• What Is the Minimum Amount That a Collection Agency Will Sue For?
• What Is the Phone Number for IQ Data?
• What is the Purpose of the Truth in the Lending Act?
• What is the status of my case?
• What Is the Statute of Limitations on Debt in Washington?
• What is the Telemarketing Sales Rule?
• What is Unsecured Credit Card Debt?
• What is WCTCB?
• What is WFDS?
• What is WUVISAAFT?
• What is Zombie Debt, and How Do I Deal With It?
• What Personal Property Can Be Seized in a Judgment?
• What Should I Do If Crown Asset Management Suing Me?
• What Should I Do If OneMain Financial Is Taking Me to Court?
• What Should You Do if You Can't Pay Your Mortgage?
• What states require a professional licensing number for debt collectors?
• When Does Exeter Finance Repo Cars?
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• Where’s My Amended Tax Return?
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Assignment of Accounts Receivable: Meaning, Considerations

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

Charlene Rhinehart is a CPA , CFE, chair of an Illinois CPA Society committee, and has a degree in accounting and finance from DePaul University.

Investopedia / Jiaqi Zhou

What Is Assignment of Accounts Receivable?

Assignment of accounts receivable is a lending agreement whereby the borrower assigns accounts receivable to the lending institution. In exchange for this assignment of accounts receivable, the borrower receives a loan for a percentage, which could be as high as 100%, of the accounts receivable.

The borrower pays interest, a service charge on the loan, and the assigned receivables serve as collateral. If the borrower fails to repay the loan, the agreement allows the lender to collect the assigned receivables.

Key Takeaways

• Assignment of accounts receivable is a method of debt financing whereby the lender takes over the borrowing company's receivables.
• This form of alternative financing is often seen as less desirable, as it can be quite costly to the borrower, with APRs as high as 100% annualized.
• Usually, new and rapidly growing firms or those that cannot find traditional financing elsewhere will seek this method.
• Accounts receivable are considered to be liquid assets.
• If a borrower doesn't repay their loan, the assignment of accounts agreement protects the lender.

Understanding Assignment of Accounts Receivable

With an assignment of accounts receivable, the borrower retains ownership of the assigned receivables and therefore retains the risk that some accounts receivable will not be repaid. In this case, the lending institution may demand payment directly from the borrower. This arrangement is called an "assignment of accounts receivable with recourse." Assignment of accounts receivable should not be confused with pledging or with accounts receivable financing .

An assignment of accounts receivable has been typically more expensive than other forms of borrowing. Often, companies that use it are unable to obtain less costly options. Sometimes it is used by companies that are growing rapidly or otherwise have too little cash on hand to fund their operations.

New startups in Fintech, like C2FO, are addressing this segment of the supply chain finance by creating marketplaces for account receivables. Liduidx is another Fintech company providing solutions through digitization of this process and connecting funding providers.

Financiers may be willing to structure accounts receivable financing agreements in different ways with various potential provisions.​

Special Considerations

Accounts receivable (AR, or simply "receivables") refer to a firm's outstanding balances of invoices billed to customers that haven't been paid yet. Accounts receivables are reported on a company’s balance sheet as an asset, usually a current asset with invoice payments due within one year.

Accounts receivable are considered to be a relatively liquid asset . As such, these funds due are of potential value for lenders and financiers. Some companies may see their accounts receivable as a burden since they are expected to be paid but require collections and cannot be converted to cash immediately. As such, accounts receivable assignment may be attractive to certain firms.

The process of assignment of accounts receivable, along with other forms of financing, is often known as factoring, and the companies that focus on it may be called factoring companies. Factoring companies will usually focus substantially on the business of accounts receivable financing, but factoring, in general, a product of any financier.

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What is an Assignment of Debt?

By Sej Lamba

Updated on 23 July 2024 Reading time: 5 minutes

This article meets our strict editorial principles. Our lawyers, experienced writers and legally trained editorial team put every effort into ensuring the information published on our website is accurate. We encourage you to seek independent legal advice. Learn more .

When Could an Assignment of Debt Happen?

Key issues on assignment of debt, drafting the correct documentation, giving notice, key takeaways.

Debts are increasingly common in today’s financial climate, and unfortunately, many people struggle to repay what they owe. Debts owed can be sold to third parties and a lot of companies in the UK purchase debts. However, this can be complicated as specific legal formalities apply when assigning debts. This article will explain some of the critical issues around the assignment of debt. 

Debt collection can be a complex process. There are various reasons as to why debt is assigned. For example, a company owed debt may want to avoid putting in time and effort to chase it or want to take legal action to recover it. 

To picture a scenario, imagine this:

• Joe Bloggs gets a brand-new shiny credit card. Joe purchases lots of nice things for his family with the credit card. Usually, he can keep up with payments as he keeps track of them and earns enough to pay them back;
• suddenly, Joe has an injury and cannot work anymore. He has to give up his job and now can’t afford to pay the credit card company back;
• Joe ignores various letters chasing the debt and hopes the problem will disappear. Ultimately, after months, the credit card company gives up and sells Joe’s debt to a debt collection agency.  

So, in summary – after the debt sale, Joe now owes money to a different company. 

In practice, debt assignments can be complex, and the parties must follow the relevant legal rules and draft the correct documentation.

An assignment of debt essentially transfers the debt from one party (the assignor) to a third party (an assignee). 

In practice, this will mean the original debtor (e.g. Joe Bloggs) will now owe the debt to a new third-party creditor (e.g. the debt collection business). Therefore, in the scenario above, Joe must now repay the debt to the third-party debt collection business.

This process can be complex. There have been several legal cases in the courts where this process has given rise to disputes.

To avoid lengthy and expensive disputes, it’s important to have up-to-date legal contracts in place. Our contract lawyers can review and update your contracts to ensure your business is protected. Book a complimentary consultation today by filling out the form on this page.

There are two different types of assignment of debt – a legal assignment of debt and an equitable assignment of debt. 

In simple terms:

• a legal assignment of debt will transfer the right for enforcement of the debt; and
• an equitable assignment of debt will transfer only the benefit of the debt without the right to enforce it. 

Let us explore each type below.

Legal Assignment of Debt 

If the assignment complies with specific legal requirements under the Law of Property Act 1925, it will be a ‘legal assignment’. This means that the assignee will be the new owner of the debt. 

A legal assignment requires various formalities to be effective. For example, it must:

• be in writing and signed by the assignor;
• the debtor must be given written notice of the assignment;
• be absolute with no conditions attached to it;
• relate to the whole of the debt and not just part of it; and
• not be a charge.

After the transfer of the debt, the assignor can sue the debtor in its own name. 

Equitable Assignment of Debt

It is also possible to have an equitable debt transfer – the requirements for this are much less strict. For example, this can be done informally by the assignor informing the assignee that the rights are transferred to them. 

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For an equitable assignment, giving notice is not essential, but still always highly advisable. 

Where an equitable assignment is made, the assignee won’t have the right to pursue court action for the debt. In this case, the assignee will have to join forces with the assignor to sue for the debt to sue for the debt. 

The debtor should receive notice of any debt transfer so they know to whom the money is owed. Following notice, the new debt owner can pursue the debt owed. 

A legal assignment is the best option for an assignee of debt – this will give them full rights to enforce the debt. 

Assignments of debts can be very complex. For a legal assignment of debt, you need to follow various formalities. Otherwise, it may be unenforceable and lead to disputes. If you need help executing a debt assignment correctly, you should seek legal advice from an experienced lawyer.

If you need help with an assignment of debt, LegalVision’s experienced business lawyers can assist as part of our LegalVision membership. You will have unlimited access to lawyers to answer your questions and draft and review your documents for a low monthly fee. Call us today on 0808 196 8584 or visit our membership page .

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Legal Templates

Home Assignment Agreement

Assignment Agreement Template

Use our assignment agreement to transfer contractual obligations.

Updated February 1, 2024 Written by Josh Sainsbury | Reviewed by Brooke Davis

An assignment agreement is a legal document that transfers rights, responsibilities, and benefits from one party (the “assignor”) to another (the “assignee”). You can use it to reassign debt, real estate, intellectual property, leases, insurance policies, and government contracts.

What Is an Assignment Agreement?

What to include in an assignment agreement, how to assign a contract, how to write an assignment agreement, assignment agreement sample.

Partnership Interest

An assignment agreement effectively transfers the rights and obligations of a person or entity under an initial contract to another. The original party is the assignor, and the assignee takes on the contract’s duties and benefits.

It’s often a requirement to let the other party in the original deal know the contract is being transferred. It’s essential to create this form thoughtfully, as a poorly written assignment agreement may leave the assignor obligated to certain aspects of the deal.

The most common use of an assignment agreement occurs when the assignor no longer can or wants to continue with a contract. Instead of leaving the initial party or breaking the agreement, the assignor can transfer the contract to another individual or entity.

For example, imagine a small residential trash collection service plans to close its operations. Before it closes, the business brokers a deal to send its accounts to a curbside pickup company providing similar services. After notifying account holders, the latter company continues the service while receiving payment.

Create a thorough assignment agreement by including the following information:

• Effective Date:  The document must indicate when the transfer of rights and obligations occurs.
• Parties:  Include the full name and address of the assignor, assignee, and obligor (if required).
• Assignment:  Provide details that identify the original contract being assigned.
• Third-Party Approval: If the initial contract requires the approval of the obligor, note the date the approval was received.
• Signatures:  Both parties must sign and date the printed assignment contract template once completed. If a notary is required, wait until you are in the presence of the official and present identification before signing. Failure to do so may result in having to redo the assignment contract.

Review the Contract Terms

Carefully review the terms of the existing contract. Some contracts may have specific provisions regarding assignment. Check for any restrictions or requirements related to assigning the contract.

Check for Anti-Assignment Clauses

Some contracts include anti-assignment clauses that prohibit or restrict the ability to assign the contract without the consent of the other party. If there’s such a clause, you may need the consent of the original parties to proceed.

Determine Assignability

Ensure that the contract is assignable. Some contracts, especially those involving personal services or unique skills, may not be assignable without the other party’s agreement.

Get Consent from the Other Party (if Required)

If the contract includes an anti-assignment clause or requires consent for assignment, seek written consent from the other party. This can often be done through a formal amendment to the contract.

Prepare an Assignment Agreement

Draft an assignment agreement that clearly outlines the transfer of rights and obligations from the assignor (the party assigning the contract) to the assignee (the party receiving the assignment). Include details such as the names of the parties, the effective date of the assignment, and the specific rights and obligations being transferred.

Include Original Contract Information

Attach a copy of the original contract or reference its key terms in the assignment agreement. This helps in clearly identifying the contract being assigned.

Execution of the Assignment Agreement

Both the assignor and assignee should sign the assignment agreement. Signatures should be notarized if required by the contract or local laws.

Notice to the Other Party

Provide notice of the assignment to the non-assigning party. This can be done formally through a letter or as specified in the contract.

File the Assignment

File the assignment agreement with the appropriate parties or entities as required. This may include filing with the original contracting party or relevant government authorities.

Communicate with Third Parties

Inform any relevant third parties, such as suppliers, customers, or service providers, about the assignment to ensure a smooth transition.

Keep Copies for Records

Keep copies of the assignment agreement, original contract, and any related communications for your records.

Here’s a list of steps on how to write an assignment agreement:

Step 1 – List the Assignor’s and Assignee’s Details

List all of the pertinent information regarding the parties involved in the transfer. This information includes their full names, addresses, phone numbers, and other relevant contact information.

This step clarifies who’s transferring the initial contract and who will take on its responsibilities.

Step 2 – Provide Original Contract Information

Describing and identifying the contract that is effectively being reassigned is essential. This step avoids any confusion after the transfer has been completed.

Step 3 – State the Consideration

Provide accurate information regarding the amount the assignee pays to assume the contract. This figure should include taxes and any relevant peripheral expenses. If the assignee will pay the consideration over a period, indicate the method and installments.

Step 4 – Provide Any Terms and Conditions

The terms and conditions of any agreement are crucial to a smooth transaction. You must cover issues such as dispute resolution, governing law, obligor approval, and any relevant clauses.

Step 5 – Obtain Signatures

Both parties must sign the agreement to ensure it is legally binding and that they have read and understood the contract. If a notary is required, wait to sign off in their presence.

Related Documents

• Sales and Purchase Agreement : Outlines the terms and conditions of an item sale.
• Business Contract : An agreement in which each party agrees to an exchange, typically involving money, goods, or services.
• Lease/Rental Agreement : A lease agreement is a written document that officially recognizes a legally binding relationship between two parties -- a landlord and a tenant.
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Deeds of Assignment of a Debt – Your Top Questions Answered

Posted by david cammack on february 7, 2020.

Home / Blog / Deeds of Assignment of a Debt – Your Top Questions Answered

( Revised for 2023. )

Do you want to know more about what a deed of assignment of a debt is, if you need one, or what to include in it? If so, our blog article has all the answers. So today, we are answering the top questions from the Internet about deeds of assignment of a debt.

1. Can a debt be assigned? How do I assign a debt in the UK?

Yes. Banks regularly buy and sell debts. If you are a creditor, then you can do so too. But you need to do so in writing. A deed of assignment of a debt is the document to use for this. You would need to assign the whole of a debt, as you cannot assign only part of it. The debtor cannot assign the debt to someone else unless the creditor agrees and you would then do this via a deed of novation.

2. What is an assignment of a loan?

This means the same thing as an assignment of a debt. It is always the right to receive repayment of the debt or loan that you are assigning.

3. What is a deed of assignment of a debt?

This is a legal document that transfers the ownership of the debt to another person. By ‘ownership’ we mean the right to receive repayment of that debt from the same original debtor or borrower.

4. What does assignment of debt mean?

The assignment of a debt will mean that the original debtor or borrower now owes the debt to a different creditor. So the debtor will now need to repay that debt to a new person, because you have transferred the debt.

5. Is a deed of assignment of a debt a legal document?

If prepared correctly, yes, a deed of assignment is a legally-binding document. In order to make the assignment legally binding on the debtor, the creditor should give notice of the assignment to the debtor. Our template includes a notice of the assignment of the debt, so you can complete it and send it to the debtor.

6. What is a notice of assignment of a debt? What do I need to do to give notice of an assignment of a debt?

Once you have assigned a debt, then you need to give the debtor notice of the transfer of the debt. Otherwise, how will they know to repay the new owner of the debt? Ideally, the deed of assignment of debt will mention this and include a form for the notice. (Legalo’s template does.) Wikipedia explains why such notice is necessary here: https://en.wikipedia.org/wiki/Rule_in_Dearle_v_Hall#Criticisms .

7. How do you draft a deed of assignment of a debt?

If you require this deed, then the quickest way to get one is with a template from Legalo. Find our great template here: just click on this link .

8. What are the contents of a deed of assignment of a debt?

If you click on this link and scroll down to the section about the Guide to the template, then you will see the contents of our template for a deed of assignment of a debt.

9. Who can prepare a deed of assignment of a debt? Can a non-lawyer prepare a deed of assignment of a debt?

A non-lawyer can use any of the documents we sell as templates. So this includes a deed of assignment of a debt.

10. Does a deed of assignment of a debt need to be signed by both parties?

The parties who do need to sign it are (a) the original creditor and (b) the one buying (or otherwise taking) the debt from the original creditor. The debtor does not sign it.

11. Does a deed of assignment of a debt need to be witnessed?

All deeds need to be signed correctly with an adult witness, preferably one who none of the persons signing are related to.

12. Does an assignment of debt need to be a deed?

If there is no price being paid for the purchase of the debt, then the document does need to be a deed, in order to ensure it is legally binding. Otherwise, technically it does not need to be prepared and signed as a deed, but generally it is better to do it as a deed in case there is any doubt. Legalo’s template is set up to be signed as a deed.

13. Does a deed of assignment of a debt need to be registered?

Not unless you have secured the debt, for example on a property in the UK at the Land Registry. In such a case, then you would need to register the transfer of the security separately at the Land Registry. You do not register the assignment of the debt itself.

14. How long does a deed of assignment of a debt take to draft?

Legalo’s template makes it easy, so you should only need a few minutes to draft your deed of assignment.

15. How much does a deed of assignment of a debt cost? How much does a notice of assignment of a debt cost? How much do lawyers charge for deed of assignment of a debt?

Our template for a deed of assignment includes a notice of assignment and costs only £24.95. Solicitors would charge an estimated £500 plus VAT for one, so ours represents a significant cost saving.

In just a few minutes yours can be ready. What’s more, Legalo’s templates each come with a guide to make it clear how to complete it. We also provide a free helpline just in case you need any extra assistance to use it. So it could not be easier.

So if you need one, you know where to find it.

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B3-6-05, Monthly Debt Obligations (05/04/2022)

Alimony, child support, and separate maintenance payments, bridge / swing loans, business debt in borrower’s name, court-ordered assignment of debt, debts paid by others, non-applicant accounts, deferred installment debt, federal income tax installment agreements, garnishments, home equity lines of credit, installment debt, lease payments, rental housing payment, loans secured by financial assets, open 30–day charge accounts, other real estate owned—qualifying impact, revolving charge/lines of credit, student loans.

When the borrower is required to pay alimony, child support, or separate maintenance payments under a divorce decree, separation agreement, or any other written legal agreement—and those payments must continue to be made for more than ten months—the payments must be considered as part of the borrower’s recurring monthly debt obligations. However, voluntary payments do not need to be taken into consideration and an exception is allowed for alimony. A copy of the divorce decree, separation agreement, court order, or equivalent documentation confirming the amount of the obligation must be obtained and retained in the loan file.

For alimony and separate maintenance obligations, the lender has the option to reduce the qualifying income by the amount of the obligation in lieu of including it as a monthly payment in the calculation of the DTI ratio.

Note : For loan casefiles underwritten through DU, when using the option of reducing the borrower’s monthly qualifying income by the alimony or separate maintenance payment, the lender must enter the amount of the monthly obligation as a negative alimony or separate maintenance income amount. (If the borrower also receives alimony or separate maintenance income, the amounts should be combined and entered as a net amount.)

When a borrower obtains a bridge (or swing) loan, the funds from that loan can be used for closing on a new principal residence before the current residence is sold. This creates a contingent liability that must be considered part of the borrower’s recurring monthly debt obligations and included in the DTI ratio calculation.

Fannie Mae will waive this requirement and not require the debt to be included in the DTI ratio if the following documentation is provided:

a fully executed sales contract for the current residence, and

confirmation that any financing contingencies have been cleared.

When a self-employed borrower claims that a monthly obligation that appears on their personal credit report (such as a Small Business Administration loan) is being paid by the borrower’s business, the lender must confirm that it verified that the obligation was actually paid out of company funds and that this was considered in its cash flow analysis of the borrower’s business.

The account payment does not need to be considered as part of the borrower’s DTI ratio if:

the account in question does not have a history of delinquency,

the business provides acceptable evidence that the obligation was paid out of company funds (such as 12 months of canceled company checks), and

the lender’s cash flow analysis of the business took payment of the obligation into consideration.

The account payment must be considered as part of the borrower’s DTI ratio in any of the following situations:

If the business does not provide sufficient evidence that the obligation was paid out of company funds.

If the business provides acceptable evidence of its payment of the obligation, but the lender’s cash flow analysis of the business does not reflect any business expense related to the obligation (such as an interest expense—and taxes and insurance, if applicable—equal to or greater than the amount of interest that one would reasonably expect to see given the amount of financing shown on the credit report and the age of the loan). It is reasonable to assume that the obligation has not been accounted for in the cash flow analysis.

If the account in question has a history of delinquency. To ensure that the obligation is counted only once, the lender should adjust the net income of the business by the amount of interest, taxes, or insurance expense, if any, that relates to the account in question.

When a borrower has outstanding debt that was assigned to another party by court order (such as under a divorce decree or separation agreement) and the creditor does not release the borrower from liability, the borrower has a contingent liability. The lender is not required to count this contingent liability as part of the borrower’s recurring monthly debt obligations.

The lender is not required to evaluate the payment history for the assigned debt after the effective date of the assignment. The lender cannot disregard the borrower’s payment history for the debt before its assignment.

Certain debts can be excluded from the borrower’s recurring monthly obligations and the DTI ratio:

When a borrower is obligated on a non-mortgage debt - but is not the party who is actually repaying the debt - the lender may exclude the monthly payment from the borrower's recurring monthly obligations. This policy applies whether or not the other party is obligated on the debt, but is not applicable if the other party is an interested party to the subject transaction (such as the seller or real estate agent). Non-mortgage debts include installment loans, student loans, revolving accounts, lease payments, alimony, child support, and separate maintenance. See below for treatment of payments due under a federal income tax installment agreement.

When a borrower is obligated on a mortgage debt - but is not the party who is actually repaying the debt - the lender may exclude the full monthly housing expense (PITIA) from the borrower’s recurring monthly obligations if

the party making the payments is obligated on the mortgage debt,

there are no delinquencies in the most recent 12 months, and

the borrower is not using rental income from the applicable property to qualify.

In order to exclude non-mortgage or mortgage debts from the borrower’s DTI ratio, the lender must obtain the most recent 12 months' canceled checks (or bank statements) from the other party making the payments that document a 12-month payment history with no delinquent payments.

When a borrower is obligated on a mortgage debt, regardless of whether or not the other party is making the monthly mortgage payments, the referenced property must be included in the count of financed properties (if applicable per B2-2-03, Multiple Financed Properties for the Same Borrower B2-2-03, Multiple Financed Properties for the Same Borrower .

Credit reports may include accounts identified as possible non-applicant accounts (or with other similar notation). Non-applicant accounts may belong to the borrower, or they may truly belong to another individual.

Typical causes of non-applicant accounts include:

applicants who are Juniors or Seniors,

individuals who move frequently,

unrelated individuals who have identical names, and

debts the borrower applied for under a different Social Security number or under a different address. These may be indicative of potential fraud.

If the debts do not belong to the borrower, the lender may provide supporting documentation to validate this, and may exclude the non-applicant debts for the borrower’s DTI ratio. If the debts do belong to the borrower, they must be included as part of the borrower’s recurring monthly debt obligations.

Deferred installment debts must be included as part of the borrower’s recurring monthly debt obligations. For deferred installment debts other than student loans, if the borrower’s credit report does not indicate the monthly amount that will be payable at the end of the deferment period, the lender must obtain copies of the borrower’s payment letters or forbearance agreements so that a monthly payment amount can be determined and used in calculating the borrower’s total monthly obligations.

For information about deferred student loans, see Student Loans below.

When a borrower has entered into an installment agreement with the IRS to repay delinquent federal income taxes, the lender may include the monthly payment amount as part of the borrower’s monthly debt obligations (in lieu of requiring payment in full) if:

There is no indication that a Notice of Federal Tax Lien has been filed against the borrower in the county in which the subject property is located.

The lender obtains the following documentation:

an approved IRS installment agreement with the terms of repayment, including the monthly payment amount and total amount due; and

evidence the borrower is current on the payments associated with the tax installment plan. Acceptable evidence includes the most recent payment reminder from the IRS, reflecting the last payment amount and date and the next payment amount owed and due date. At least one payment must have been made prior to closing.

As a reminder, lenders remain responsible under the life-of-loan representations and warranties for clear title and first-lien enforceability in accordance with A2-2-07, Life-of-Loan Representations and Warranties A2-2-07, Life-of-Loan Representations and Warranties .

The payments on a federal income tax installment agreement can be excluded from the borrower’s DTI ratio if the agreement meets the terms in Debts Paid by Others or Installment Debt described above. If any of the above conditions are not met, the borrower must pay off the outstanding balance due under the installment agreement with the IRS in accordance with B3-6-07, Debts Paid Off At or Prior to Closing B3-6-07, Debts Paid Off At or Prior to Closing

All garnishments with more than ten months remaining must be included in the borrower’s recurring monthly debt obligations for qualifying purposes.

When the mortgage that will be delivered to Fannie Mae also has a home equity line of credit (HELOC) that provides for a monthly payment of principal and interest or interest only, the payment on the HELOC must be considered as part of the borrower’s recurring monthly debt obligations. If the HELOC does not require a payment, there is no recurring monthly debt obligation so the lender does not need to develop an equivalent payment amount.

All installment debt that is not secured by a financial asset—including student loans, automobile loans, personal loans, and timeshares—must be considered part of the borrower’s recurring monthly debt obligations if there are more than ten monthly payments remaining. However, an installment debt with fewer monthly payments remaining also should be considered as a recurring monthly debt obligation if it significantly affects the borrower’s ability to meet their credit obligations. See below for treatment of payments due under a federal income tax installment agreement.

Note: A timeshare account should be treated as an installment debt regardless of how it is reported on the credit report or other documentation (that is, even if reported as a mortgage loan).

Lease payments must be considered as recurring monthly debt obligations regardless of the number of months remaining on the lease. This is because the expiration of a lease agreement for rental housing or an automobile typically leads to either a new lease agreement, the buyout of the existing lease, or the purchase of a new vehicle or house.

The housing payment for each borrower’s principal residence must be considered when underwriting the loan. For the following scenarios, the borrower’s monthly rental housing payment must be evaluated (if the borrower does not otherwise have a mortgage payment or no housing expense):

for non-occupant borrowers, and

for second homes or investment properties.

The following list provides examples of acceptable documentation to verify the rental payment:

six months canceled checks or equivalent payment source;

six months bank statements reflecting a clear and consistent payment to an organization or individual;

direct verification of rent from a management company or individual landlord; or

a copy of a current, fully executed lease agreement and two months canceled checks (or equivalent payment source) supporting the rental payment amount.

Note: Refer to B3-5.4-03, Documentation and Assessment of a Nontraditional Credit History B3-5.4-03, Documentation and Assessment of a Nontraditional Credit History for rental payment history requirements when using non-traditional credit.

When a borrower uses their financial assets—life insurance policies, 401(k) accounts, individual retirement accounts, certificates of deposit, stocks, bonds, etc.—as security for a loan, the borrower has a contingent liability.

The lender is not required to include this contingent liability as part of the borrower’s recurring monthly debt obligations provided the lender obtains a copy of the applicable loan instrument that shows the borrower’s financial asset as collateral for the loan. If the borrower intends to use the same asset to satisfy financial reserve requirements, the lender must reduce the value of the asset (the account balance, in most cases) by the proceeds from the secured loan and any related fees to determine whether the borrower has sufficient reserves.

Note: Payment on any debt secured by virtual currency is an exception to the above policy and must be included when calculating the debt-to-income ratio.

Open 30–day charge accounts require the balance to be paid in full every month. Fannie Mae does not require open 30–day charge accounts to be included in the debt-to-income ratio.

See B3-6-07, Debts Paid Off At or Prior to Closing B3-6-07, Debts Paid Off At or Prior to Closing , for additional information on open 30–day charge accounts.

For details regarding the qualifying impact of other real estate owned, see B3-6-06, Qualifying Impact of Other Real Estate Owned B3-6-06, Qualifying Impact of Other Real Estate Owned .

Revolving charge accounts and unsecured lines of credit are open-ended and should be treated as long-term debts and must be considered part of the borrower's recurring monthly debt obligations. These tradelines include credit cards, department store charge cards, and personal lines of credit. Equity lines of credit secured by real estate should be included in the housing expense.

If the credit report does not show a required minimum payment amount and there is no supplemental documentation to support a payment of less than 5%, the lender must use 5% of the outstanding balance as the borrower's recurring monthly debt obligation.

For DU loan casefiles, if a revolving debt is provided on the loan application without a monthly payment amount, DU will use the greater of $10 or 5% of the outstanding balance as the monthly payment when calculating the total debt-to-income ratio.

If a monthly student loan payment is provided on the credit report, the lender may use that amount for qualifying purposes. If the credit report does not reflect the correct monthly payment, the lender may use the monthly payment that is on the student loan documentation (the most recent student loan statement) to qualify the borrower.

If the credit report does not provide a monthly payment for the student loan, or if the credit report shows $0 as the monthly payment, the lender must determine the qualifying monthly payment using one of the options below.

If the borrower is on an income-driven payment plan, the lender may obtain student loan documentation to verify the actual monthly payment is $0. The lender may then qualify the borrower with a $0 payment.

For deferred loans or loans in forbearance, the lender may calculate

a payment equal to 1% of the outstanding student loan balance (even if this amount is lower than the actual fully amortizing payment), or

a fully amortizing payment using the documented loan repayment terms.

The table below provides references to recently issued Announcements that are related to this topic.

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Originating & Underwriting

Selling Guide

Download PDF Guide

(Published: August 07 2024)

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Guide Resources

Forms, announcements, lender letters, legal documents, and more.

Browse the Guide

• Copyright and Preface
• A1-1-01, Application and Approval of Seller/Servicer
• A2-1-01, Contractual Obligations for Sellers/Servicers
• A2-1-02, Nature of Mortgage Transaction
• A2-1-03, Indemnification for Losses
• A2-2-01, Representations and Warranties Overview
• A2-2-02, Delivery Information and Delivery-Option Specific Representations and Warranties
• A2-2-03, Document Warranties
• A2-2-04, Limited Waiver and Enforcement Relief of Representations and Warranties
• A2-2-05, Invalidation of Limited Waiver of Representations and Warranties
• A2-2-06, Representations and Warranties on Property Value
• A2-2-07, Life-of-Loan Representations and Warranties
• A2-3.1-01, Lender Breach of Contract
• A2-3.1-02, Sanctions, Suspensions, and Terminations
• A2-3.2-01, Loan Repurchases and Make Whole Payments Requested by Fannie Mae
• A2-3.2-02, Enforcement Relief for Breaches of Certain Representations and Warranties Related to Underwriting and Eligibility
• A2-3.2-03, Remedies Framework
• A2-3.3-01, Compensatory Fees
• A2-4.1-01, Establishing Loan Files
• A2-4.1-02, Ownership and Retention of Loan Files and Records
• A2-4.1-03, Electronic Records, Signatures, and Transactions
• A2-4.1-04, Notarization Standards
• A2-5-01, Fannie Mae Trade Name and Trademarks
• A3-1-01, Fannie Mae’s Technology Products
• A3-2-01, Compliance With Laws
• A3-2-02, Responsible Lending Practices
• A3-3-01, Outsourcing of Mortgage Processing and Third-Party Originations
• A3-3-02, Concurrent Servicing Transfers
• A3-3-03, Other Servicing Arrangements
• A3-3-04, Document Custodians
• A3-3-05, Custody of Mortgage Documents
• A3-4-01, Confidentiality of Information
• A3-4-02, Data Quality and Integrity
• A3-4-03, Preventing, Detecting, and Reporting Mortgage Fraud
• A3-5-01, Fidelity Bond and Errors and Omissions Coverage Provisions
• A3-5-02, Fidelity Bond Policy Requirements
• A3-5-03, Errors and Omissions Policy Requirements
• A3-5-04, Reporting Fidelity Bond and Errors and Omissions Events
• A4-1-01, Maintaining Seller/Servicer Eligibility
• A4-1-02, Submission of Financial Statements and Reports
• A4-1-03, Report of Changes in the Seller/Servicer’s Organization
• A4-1-04, Submission of Irrevocable Limited Powers of Attorney
• B1-1-01, Contents of the Application Package
• B1-1-02, Blanket Authorization Form
• B1-1-03, Allowable Age of Credit Documents and Federal Income Tax Returns
• B2-1.1-01, Occupancy Types
• B2-1.2-01, Loan-to-Value (LTV) Ratios
• B2-1.2-02, Combined Loan-to-Value (CLTV) Ratios
• B2-1.2-03, Home Equity Combined Loan-to-Value (HCLTV) Ratios
• B2-1.2-04, Subordinate Financing
• B2-1.3-01, Purchase Transactions
• B2-1.3-02, Limited Cash-Out Refinance Transactions
• B2-1.3-03, Cash-Out Refinance Transactions
• B2-1.3-04, Prohibited Refinancing Practices
• B2-1.3-05, Payoff of Installment Land Contract Requirements
• B2-1.4-01, Fixed-Rate Loans
• B2-1.4-02, Adjustable-Rate Mortgages (ARMs)
• B2-1.4-03, Convertible ARMs
• B2-1.4-04, Temporary Interest Rate Buydowns
• B2-1.5-01, Loan Limits
• B2-1.5-02, Loan Eligibility
• B2-1.5-03, Legal Requirements
• B2-1.5-04, Escrow Accounts
• B2-1.5-05, Principal Curtailments
• B2-2-01, General Borrower Eligibility Requirements
• B2-2-02, Non–U.S. Citizen Borrower Eligibility Requirements
• B2-2-03, Multiple Financed Properties for the Same Borrower
• B2-2-04, Guarantors, Co-Signers, or Non-Occupant Borrowers on the Subject Transaction
• B2-2-05, Inter Vivos Revocable Trusts
• B2-2-06, Homeownership Education and Housing Counseling
• B2-2-07, First-Generation Homebuyer Loans
• B2-3-01, General Property Eligibility
• B2-3-02, Special Property Eligibility and Underwriting Considerations: Factory-Built Housing
• B2-3-03, Special Property Eligibility and Underwriting Considerations: Leasehold Estates
• B2-3-04, Special Property Eligibility Considerations
• B2-3-05, Properties Affected by a Disaster
• B3-1-01, Comprehensive Risk Assessment
• B3-2-01, General Information on DU
• B3-2-02, DU Validation Service
• B3-2-03, Risk Factors Evaluated by DU
• B3-2-04, DU Documentation Requirements
• B3-2-05, Approve/Eligible Recommendations
• B3-2-06, Approve/Ineligible Recommendations
• B3-2-07, Refer with Caution Recommendations
• B3-2-08, Out of Scope Recommendations
• B3-2-09, Erroneous Credit Report Data
• B3-2-10, Accuracy of DU Data, DU Tolerances, and Errors in the Credit Report
• B3-2-11, DU Underwriting Findings Report
• B3-3.1-01, General Income Information
• B3-3.1-02, Standards for Employment Documentation
• B3-3.1-03, Base Pay (Salary or Hourly), Bonus, and Overtime Income
• B3-3.1-04, Commission Income
• B3-3.1-05, Secondary Employment Income (Second Job and Multiple Jobs) and Seasonal Income
• B3-3.1-06, Requirements and Uses of IRS IVES Request for Transcript of Tax Return Form 4506-C
• B3-3.1-07, Verbal Verification of Employment
• B3-3.1-08, Rental Income
• B3-3.1-09, Other Sources of Income
• B3-3.1-10, Income Calculator
• B3-3.2-01, Underwriting Factors and Documentation for a Self-Employed Borrower
• B3-3.2-02, Business Structures
• B3-3.2-03, IRS Forms Quick Reference
• B3-3.3-01, General Information on Analyzing Individual Tax Returns
• B3-3.3-02, Income Reported on IRS Form 1040
• B3-3.3-03, Income or Loss Reported on IRS Form 1040, Schedule C
• B3-3.3-04, Income or Loss Reported on IRS Form 1040, Schedule D
• B3-3.3-05, Income or Loss Reported on IRS Form 1040, Schedule E
• B3-3.3-06, Income or Loss Reported on IRS Form 1040, Schedule F
• B3-3.3-07, Income or Loss Reported on IRS Form 1065 or IRS Form 1120S, Schedule K-1
• B3-3.4-01, Analyzing Partnership Returns for a Partnership or LLC
• B3-3.4-02, Analyzing Returns for an S Corporation
• B3-3.4-03, Analyzing Returns for a Corporation
• B3-3.4-04, Analyzing Profit and Loss Statements
• B3-3.5-01, Income and Employment Documentation for DU
• B3-3.5-02, Income from Rental Property in DU
• B3-4.1-01, Minimum Reserve Requirements
• B3-4.1-02, Interested Party Contributions (IPCs)
• B3-4.1-03, Types of Interested Party Contributions (IPCs)
• B3-4.1-04, Virtual Currency
• B3-4.2-01, Verification of Deposits and Assets
• B3-4.2-02, Depository Accounts
• B3-4.2-03, Individual Development Accounts
• B3-4.2-04, Pooled Savings (Community Savings Funds)
• B3-4.2-05, Foreign Assets
• B3-4.3-01, Stocks, Stock Options, Bonds, and Mutual Funds
• B3-4.3-02, Trust Accounts
• B3-4.3-03, Retirement Accounts
• B3-4.3-04, Personal Gifts
• B3-4.3-05, Gifts of Equity
• B3-4.3-06, Grants and Lender Contributions
• B3-4.3-07, Disaster Relief Grants or Loans
• B3-4.3-08, Employer Assistance
• B3-4.3-09, Earnest Money Deposit
• B3-4.3-10, Anticipated Sales Proceeds
• B3-4.3-11, Trade Equity
• B3-4.3-12, Rent-Related Credits
• B3-4.3-13, Sweat Equity
• B3-4.3-14, Bridge/Swing Loans
• B3-4.3-15, Borrowed Funds Secured by an Asset
• B3-4.3-16, Credit Card Financing and Reward Points
• B3-4.3-17, Personal Unsecured Loans
• B3-4.3-18, Sale of Personal Assets
• B3-4.3-19, Cash Value of Life Insurance
• B3-4.3-20, Anticipated Savings and Cash-on-Hand
• B3-4.3-21, Borrower's Earned Real Estate Commission
• B3-4.4-01, DU Asset Verification
• B3-4.4-02, Requirements for Certain Assets in DU
• B3-5.1-01, General Requirements for Credit Scores
• B3-5.1-02, Determining the Credit Score for a Mortgage Loan
• B3-5.2-01, Requirements for Credit Reports
• B3-5.2-02, Types of Credit Reports
• B3-5.2-03, Accuracy of Credit Information in a Credit Report
• B3-5.3-01, Number and Age of Accounts
• B3-5.3-02, Payment History
• B3-5.3-03, Previous Mortgage Payment History
• B3-5.3-04, Inquiries: Recent Attempts to Obtain New Credit
• B3-5.3-05, Credit Utilization
• B3-5.3-06, Authorized Users of Credit
• B3-5.3-07, Significant Derogatory Credit Events — Waiting Periods and Re-establishing Credit
• B3-5.3-08, Extenuating Circumstances for Derogatory Credit
• B3-5.3-09, DU Credit Report Analysis
• B3-5.4-01, Eligibility Requirements for Loans with Nontraditional Credit
• B3-5.4-02, Number and Types of Nontraditional Credit References
• B3-5.4-03, Documentation and Assessment of a Nontraditional Credit History
• B3-6-01, General Information on Liabilities
• B3-6-02, Debt-to-Income Ratios
• B3-6-03, Monthly Housing Expense for the Subject Property
• B3-6-04, Qualifying Payment Requirements
• B3-6-05, Monthly Debt Obligations
• B3-6-06, Qualifying Impact of Other Real Estate Owned
• B3-6-07, Debts Paid Off At or Prior to Closing
• B3-6-08, DU: Requirements for Liability Assessment
• B4-1.1-01, Definition of Market Value
• B4-1.1-02, Lender Responsibilities
• B4-1.1-03, Appraiser Selection Criteria
• B4-1.1-04, Unacceptable Appraisal Practices
• B4-1.1-05, Disclosure of Information to Appraisers
• B4-1.1-06, Uniform Appraisal Dataset (UAD) and the Uniform Collateral Data Portal (UCDP)
• B4-1.2-01, Appraisal Report Forms and Exhibits
• B4-1.2-02, Desktop Appraisals
• B4-1.2-03, Hybrid Appraisals
• B4-1.2-04, Appraisal Age and Use Requirements
• B4-1.2-05, Requirements for Verifying Completion and Postponed Improvements
• B4-1.3-01, Review of the Appraisal Report
• B4-1.3-02, Subject and Contract Sections of the Appraisal Report
• B4-1.3-03, Neighborhood Section of the Appraisal Report
• B4-1.3-04, Site Section of the Appraisal Report
• B4-1.3-05, Improvements Section of the Appraisal Report
• B4-1.3-06, Property Condition and Quality of Construction of the Improvements
• B4-1.3-07, Sales Comparison Approach Section of the Appraisal Report
• B4-1.3-08, Comparable Sales
• B4-1.3-09, Adjustments to Comparable Sales
• B4-1.3-10, Cost and Income Approach to Value
• B4-1.3-11, Valuation Analysis and Reconciliation
• B4-1.3-12, Appraisal Quality Matters
• B4-1.4-01, Factory-Built Housing: Manufactured Housing
• B4-1.4-02, Factory-Built Housing: Modular, Prefabricated, Panelized, or Sectional Housing
• B4-1.4-03, Condo Appraisal Requirements
• B4-1.4-04, Co-op Appraisal Requirements
• B4-1.4-05, Leasehold Interests Appraisal Requirements
• B4-1.4-06, Community Land Trust Appraisal Requirements
• B4-1.4-07, Mixed-Use Property Appraisal Requirements
• B4-1.4-08, Environmental Hazards Appraisal Requirements
• B4-1.4-09, Special Assessment or Community Facilities Districts Appraisal Requirements
• B4-1.4-10, Value Acceptance (Appraisal Waiver)
• B4-1.4-11, Value Acceptance + Property Data
• B4-2.1-01, General Information on Project Standards
• B4-2.1-02, Waiver of Project Review
• B4-2.1-03, Ineligible Projects
• B4-2.1-04, Environmental Hazard Assessments
• B4-2.1-05, Unacceptable Environmental Hazards
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Assignment of Debt – What You Need to Know

By aqila zulaiqha zulkifli ~ 23 june 2023.

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Aqila Zulaiqha Zulkifli

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Occasionally, to ensure liquidity and to reduce financial risk, a creditor may assign its rights to a debt repayment to another party. Such an arrangement is known as the assignment of debt.

An assignment generally means the transfer of contractual rights and liabilities to a third party without the concurrence of the other party to the contract. [1] The assigning party is known as the assignor, whereas the recipient party is known as the assignee.

Once an assignment occurs, the assignee stands in the exact position as the assignor and has the legal right to a debt, other remedies therein, and even the power to discharge the debt. The debtor must then, make all payments to the assignee, and not the assignor. In fact, if the debtor pays the assignor without the consent of the assignee, the debtor may risk having to pay the assignee all over again. [2]

An assignment of debt is governed by Section 4(3) of the Civil Law Act 1956 (the “Act”) (cited with approval in the Federal Court case of UMW Industries Sdn Bhd v Ah Fook [3] , in which, the elements of a statutory assignment of debt can be summarized as follows:

• the assignment must be in writing under the hand of the assignor (and not, i.e the agent of the assignor);
• the assignment must be absolute and not by way of charge only; and
• the express notice in writing must have been given to the person liable to the assignor (i.e the debtor).

The effect of a statutory assignment is that the assignee possesses the legal right to the debt and the right to sue the debtor in respect of the debt without needing to join the assignor. [4]

However, rest assured, an assignment that is not in compliance with Section 4(3) of the Act is not automatically invalid. A non-statutory assignment could still be valid in equity [5] , though the assignee would have to join the assignor in the proceeding, either as a plaintiff or defendant [6] . This is to ensure a just disposal of the action, by ensuring that all relevant parties are before the Court so that the assignor would not make a claim against the debtor in respect of the same debt.

As such, in conclusion, before accepting an assignment of debt, it is prudent for an assignee to ensure that the elements in Section 4(3) of the Act abovementioned are fulfilled. If the assignment is meant to be absolute, such terms should be clearly reflected in the deed of assignment, or the assignee runs the risk of being crippled in a legal proceeding to recover the debt in the absence of the assignor.

[1] United General Insurance Co Sdn Bhd v Progress Credit Sdn Bhd [1988] 2 MLJ 297

[2] malayawata steel berhad v government of malaysia & anor [1980] 2 mlj 103, [3] [1996] 1 mlj 365, [4] mbf factors sdn bhd v tay hing ju (t/a new general trading) [2002] 5 mlj 536, [5] khaw poh chhuan v ng gaik peng & ors [1996] 1 mlj 761 (fc), [6] chan min swee v melawangi sdn bhd [2000] 7 clj 1.

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DEBT BUYER MUST PROVE ASSIGNMENT

By Guest Informed, December 16, 2011 in Collections

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“Debt Buyer Sentenced For Fraud Conviction,” Collections & Credit Risk (November 19, 2009) (quoting Dan Cofall of NorAm Capital Holdings). Other problems have included debtors settling with one creditor and then being sued by another who allegedly purchased the debt (Smith v. Mallick, 514 F.3d 48 (D.C.Cir. 2008)), disputes between debt buyers over who owns which account when buyers have purchased partial portfolios (Wood v. M&J Recovery LLC, CV 05-5564, 2007 U.S. Dist. LEXIS 24157 (E.D.N.Y., April 2, 2007) (dispute over who owned the 1/5th of a portfolio that included the debtor’s account), or debt buyers attempting to collect monies in excess of the balance of a previously settled debt (Overcash v. United Abstract Group, Inc., 549 F. Supp. 2d 193 (N.D.N.Y. 2008)).

In a string of cases refusing to grant judgment to debt buyers based on confusion over ownership, the New York courts have succinctly summarized the issue:

Because multiple creditors may make collection efforts for the same underlying debt even after assignment… failure to give notice of an assignment may result in the debtor having to pay the same debt more than once or ignoring a notice because the debtor believes he or she has previously settled the claim.

MBNA Am. Bank v. Nelson, 15 Misc. 3rd 1148, 841 N.Y.S. 2d 846 (N.Y. 2007). The problem of establishing ownership, according to the MBNA court, deals squarely with the core issue of standing, i.e., the ability to even bring the case into court:

It is imperative that an assignee establish its standing before a court, since "lack of standing renders the litigation a nullity." It is the "assignee's burden to prove the assignment" and "an assignee must tender proof of assignment of a particular account or, if there were an oral assignment, evidence of consideration paid and delivery of the assignment." Such assignment must clearly establish that Respondent's account was included in the assignment. A general assignment of accounts will not satisfy this standard and the full chain of valid assignments must be provided, beginning with the assignor where the debt originated and concluding with the Petitioner. . . .

This problem has come to the forefront because Issuers, Debt Buyers and the ARM industry face a set of “perfect storm” circumstances. High debt volume, high default and a long economic downturn have resulted in heightened scrutiny of the industries as well as increased regulations and awareness about deficiencies that exist in proving account level ownership. This in turn creates enormous hurdles in proving the fundamental basis of a lawsuit: standing, which in turn leads to substantial enterprise wide regulatory actions and legal action exposure, higher costs, reduced efficiencies, and lower recovery rates.

The response by regulators, judges and lawmakers has been to increase the burden of verification significantly for the debt owner, making the cost and effort to collect on purchased debt inordinately high absent proof of ownership. At least one municipality, five states and one set of local court rules now require additional proof from debt owners to verify their ownership of accounts in collection suits or otherwise subject debt buyers to requirements formerly restricted to collection agencies:

Jurisdiction

Law or Rule

Requirements

New York City Council

Local Rule No. 15 (amending NY Admin. Code 20489) and implementing rules from Department of Consumer Affairs

Subjects debt buyers to same requirements as collection agencies; requires for purchased debt a record of the name and address of the seller, date of purchase and amount of debt at time of purchase

New York State

Consumer Credit Fairness Act (CCFA)

Proof of debt must include name of original creditor and all assignees

Debt buyers added to this Act—requires written agreement evidencing assignment of debt, recording of assignments

Circuit Court of Cook County,

Local rule 10.9

Debt buyer suits shall include “Legallysufficient documentation for each transfer or assignment of the account, including documents identifying the specific account”

North Carolina

Changes to N.C. G.S. 58-70-150)

Subjects debt buyers to debt collector laws; require debt buyers to provide documents proving ownership of accounts

House Bill No. 2996 (pending)

Debt buyers must attach to complaint a copy of the assignment establishing that the person is the owner of the debt, and “if debt has been assigned more than once, then each assignment or other writing evidencing transfer of ownership must be attached to establish an unbroken chain of ownership”

Changes to Tennessee Code Annotated 60-20102(3)

Subjects debt buyers to debt collector laws, requiring debt buyers to provide documents proving ownership of accounts under TCA 60-20-127(a)

In addition, numerous courts have ruled that debt buyers lacked standing to proceed with suits or claims against debtors, where the debt buyer was unable to prove a chain of title to the account. See Unifund CCR Partners v. Cavender, 14 Fla. L. Weekly Supp. 975b (Orange County, July 20, 2007); MBNA Am. Bank v. Nelson, 15 Misc. 3rd 1148, 841 N.Y.S. 2d 846 (N.Y. 2007); In re Leverett, 378 B.R. 793, 800

v. 12011***********************

********************************************************

Debt buyers added to this Act—requires written agreement evidencing assignment of debt, recording of assignments)

Nana...This is interesting "recording of assignments"...

does this mean that a Debt Buyer must record THE ASSIGNMENT WITH A COUNTY COURT RECORDER ?

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Deed of Assignment of Debt – Everything You Need to Know

Scott Nelson

Debt Expert

Scott Nelson is a renowned debt expert who supports people in debt with debt management and debt solution resources.

Janine Marsh

Financial Expert

Janine is a financial expert who supports individuals with debt management, cost-saving resources, and navigating parking tickets.

Total amount of debt?

For free & impartial money advice you can visit MoneyHelper . We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.

For free & impartial money advice you can visit MoneyHelper . We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.

Are you facing a ‘deed of assignment of debt’? Are you worried about a debt collector knocking on your door?

You’re in the right place. Each month, over 170,000 people visit our site looking for guidance on debt issues, just like this one. 

In this article, we’ll explain:

•  What a ‘deed of assignment’ is
•  What it means for your debts
•  Different types of assignment
•  Why companies sell their debts
•  Ways to handle your debt situation

We know how scary it can be when debt collectors get involved; some of our team have faced similar situations. We’re here to help you understand your situation and make the best choices.

There are several debt solutions in the UK, choosing the right one for you could write off some of your unaffordable debt , but the wrong one may be expensive and drawn out.

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Deed of Assignment of Debt – the basics

Being in debt is confusing enough as it is. And it can get even more complicated when you get a letter through the door from a company you may never have heard of demanding (often in quite a strongly-worded way) that you make your payments to them instead.

What’s going on, you might ask yourself?

At the end of the day, the creditor will want the money that you owe back.

However, sometimes when an account falls into arrears , they won’t have the capabilities or resources to claim it back . This is when the original company you owe money might ‘ assign’ your debt . 

What is a Deed of Assignment of Debt?

This is notice that tells you that you now owe a debt collection agency or another collection service the money you originally owed to the creditor .

Instead of paying the company you might have originally owed money to, you now owe a third party company. 

A deed of assignment of debt is a legal documen t alerting you of the transfer of ownership of your debt to another person. The right to receive payment from the debt you owe is transferred over to this new party as well.

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• Stop nasty calls from creditors
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A few debt solutions can even  result in writing off some of your debt.

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What does it mean?

A deed of assignment of debt is used to transfer or sell the right to recover a debt .

Without a deed of assignment of debt, the two companies are not able to do this – you need a written transfer document. 

Once the transfer document, or deed of assignment of debt, has been signed by the assignee (the party transferring the debt) and the party receiving the debt ( assignor ), they must give notice to the debtor (the person that owes the company the sum of money).

Notice must be given within 7 days of assigning the debt. Unless someone gives notice to the debtor, then the new owner of the debt can’t enforce the debt by suing in court.

Is there more than one type of assignment? 

Confusingly, there are actually two different sorts of assignment that a creditor can make. These are Legal and Equitable.

Both types of assignment fall under the Law of Property Act 1925 , and both require the creditor to inform you of the change in writing – this is known as a notice of assignment of debt .

1. Legal Assignment

Legal assignment of debt gives the company who are purchasing the debt the power to enforce it .

Basically it means that you make payments to this company instead of the original creditor, and they can send you letters and make calls to your home.

2. Equitable

If a debt is an equitable assignment, only the amount you owe is transferred , and the original creditor will still retain the original rights and responsibilities .

The purchasing company will not be able to enforce the debt either.

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Every day our partners, The Debt Advice Service, help people find out whether they can lower their repayments and finally tackle or write off some of their debt.

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Why do companies sell their debts?

A deed of assignment of debt can be a real headache, as you now have another layer of money owed. You will probably rightly ask yourself – why? And how can they sell it?

It may seem strange and confusing, but it’s actually completely legal for them to sell your debt . When you sign a credit agreement, there is almost always a clause in fine print that states that the original creditor has the power to assign their rights to a third party.

As you have signed this agreement, they don’t actually need to ask for your permission to assign your debt.

This also means that you cannot dispute it or make a complaint about it either. The only exception to this rule is if you have given evidence of mental health issues .

» TAKE ACTION NOW:  Fill out the short debt form

What are the next steps?

So that’s the basics about a Deed of Assignment of Debt. But what does this mean for you? 

If your creditor passes one of your debts onto a third party company or debt collection agency, it will be officially noted that this new company is now responsible for collection .

You will be able to see this change on your credit report , and any defaults will also be registered in their name too. 

While it certainly adds another layer of confusion to proceedings and you may be unsure of what’s going on when you find out about a deed of assignment of debt, it can occasionally be a bit of a blessing in disguise. 

You may find it much easier dealing with the new company, as they could be more flexible when it comes to discussing interest and additional charges.

There is also the likelihood that these companies actually specialise in collecting debts , and so know how to approach you as the customer with more tact and delicacy than the original creditor.

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