What is an Assignment of Debt?

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By Vanessa Swain Senior Lawyer

Updated on February 22, 2023 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 .

Perfecting Assignment

  • Enforcing an Assigned Debt 

Recovery of an Assigned Debt

  • Other Considerations 

Key Takeaways

Frequently asked questions.

I t is common for creditors, such as banks and other financiers, to assign their debt to a third party. Usually, an assig nment of debt is done in an effort to minimise the costs of recovery where a debtor has been delinquent for some time. This article looks at:

  • what it means to ‘assign a debt’;
  • the legal requirements to perfecting an assignment; and
  • common problems with enforcing an assigned debt. 

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Whether you’re a small business owner or the Chief Financial Officer of an ASX-listed company, one fact remains: your customers need to pay you.

This manual aims to help business owners, financial controllers and credit managers best manage and recover their debt.

An assignment of debt, in simple terms, is an agreement that transfers a debt owed to one entity, to another. A creditor does not need the consent of the debtor to assign a debt.

Once a debt is properly assigned, all rights and responsibilities of the original creditor (the assignor ) transfer to the new owner (the assignee ). Once an assignment of debt has been perfected, the assignee can collect the full amount of the debt owed . This includes interest recoverable under the original contract, as if they were the original creditor. A debtor is still responsible for paying the outstanding debt after an assignment. However, now, the debt or must pay the debt to the assignee rather than the original creditor.

Purchasing debt can be a lucrative business. Creditors will generally sell debt at a loss, for example, 20c for each dollar owed. Although, the amount paid will vary depending on factors such as the age of the debt and the likelihood of recovery. This can be a tax write off for the assignor, while the assignee can take steps to recover 100% of the debt owed. 

In New South Wales, the requirements for a legally binding assignment of debt are set out in the Conveyancing Act :

  • the assignment must be in writing. You do this in the form of a deed (deed of assignment) and both the assignor and assignee sign it; and
  • the assignor must provide notice to the debtor. The requirement for notice must be express and must be in writing. The assignor must notify the debtor advising them of the debt’ s assign ment and to who it has been assigned. The assignee will send a separate notice to the debtor, putting them on notice that the debt is due and payable. They will also provide them with the necessary information to make payment. 

The assignor must send the notices to the debtor’s last known address.  

Debtor as a Joined Party

In some circumstances, a debtor will be joined as a party to the deed of assignment . There can be a great benefit in this approach . This is because the debtor can provide warranties that the debt is owed and has clear notice of the assignment. However, it is not always practical to do so for a few reasons:

  • a debtor may not be on speaking terms with the assignor; 
  • a debtor may not be prepared to co-operate or provide appropriate warranties; and
  • the assignor or the assignee may not want the debtor to be made aware of the sale price . This occurs particularly where the sale price is at a significant discount.

If the debtor is not a party to the deed of assignment, proper notice of the assignment must be provided.  

An assignment of debt that has not been properly perfected will not constitute a legal debt owing to the assignee. Rather, the legal right to recover the debt will remain with the assignor. Only an equitable interest in the debt will transfer to the assignee.  

Enforcing an Assigned Debt 

After validly assigning a debt (in writing and notice has been provided to the debtor’s last known place of residence), the assignee is entitled to take any legal steps available to them to recover the outstanding debt. These recovery options include:

  • commencing court proceedings;
  • obtaining a judgment; and 
  • enforcement of that judgment.

Suppose court proceedings have been commenced or judgment already entered in favour of the assignor. In that case, the assignee must take steps to have the proceedings or judgment formally changed into the assignee’s name.  

In our experience, recovery of an assigned debt can be problematic because:  

  • debtors often do not understand the concept of debt assignment and may not be aware that their credit contract contains an assignment of debt clause;
  • disputes can arise as to whether a lawful assignment of debt has arisen. A debtor may claim that the assignor did not provide them with the requisite notice of the assignment, or in some cases, a contract will specifically exclude the creditor from legally assigning a debt;
  • proper records of the notice of assignment provided to the debtor must be maintained. If proper records have not been kept, it may be difficult to prove that notice has been properly given, which may invalidate the legal assignment; and
  • the debtor has the right to make an offsetting claim in defence to any recovery action taken by the assignee. A debtor may raise an offsetting claim which has arisen out of a previous arrangement with the assignor (which the assignee may not be aware of). For example, the debtor may have entered into an agreement with the assignor whereby the assignor agreed to accept a lesser amount of the debt owed by way of settlement. Because the assignee acquires the same rights and obligations of the assignor, the terms of that previous settlement agreement will bind the assignee. The court may find that there is no debt owing by the debtor. In this case, the assignee will have been assigned nothing of value. 

Other Considerations 

When assigning a debt, it is essential that the assignee, in particular, considers relevant statutory limitation periods for commencing proceedings or enforcing a judgment debt . In New South Wales, the time limit:

  • to file legal proceedings to recover debts is six years from the date of last payment or when the debtor admitted in writing that they owed the debt; and
  • for enforcing a judgment debt is 12 years from the date of judgment.

An assignment of a debt does not extend these limitation periods.  

While there can be benefits to both the assignor and the assignee, an assignment of debt will be unenforceable if done incorrectly. Therefore, if you are considering assigning or being assigned a debt, it is important to seek legal advice. If you need help with drafting or reviewing a deed of assignment or wish to recover a debt that has been assigned to you, contact LegalVision’s debt recovery lawyers on 1300 544 755 or fill out the form on this page.  

An assignment of debt is an agreement that transfers a debt owed to one entity, to another. A creditor does not need the consent of the debtor to assign a debt.

Once the assignee has validly assigned a debt, they are entitled to take any legal steps available to them to recover the outstanding debt. This includes commencing court proceedings, obtaining a judgment and enforcement of that judgment.

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The Enforcement of Assigned Debts

In the realm of financial recoveries, the assignment of credit contracts in default is a well-established practice. Banks and financial institutions frequently assign defaulting credit card and personal loan accounts to debt collectors in an effort to streamline their cost-effective recovery processes. At RCR Lawyers, we recognize the importance of understanding the legal intricacies surrounding the assignment of debts, and we are here to provide you with valuable insights and guidance.

Assignment of Debts: The Legal Framework

Under the Property Law Act 1974 (Qld), specifically in Section 199, provisions are made for the assignment of debt at law. This allows for the transfer of debt ownership from the original credit provider (the assignor) to the new owner (the assignee). However, it’s crucial to note that this assignment must be absolute, and written notice must be given to the debtor. Importantly, the debtor’s consent is not a prerequisite for this assignment.

Once a debt is assigned, all rights and responsibilities vested in the original credit provider are now transferred to the new owner. This transfer grants the assignee the authority to collect on the debt as if they were the initial credit provider. This includes the ability to charge interest as per the original contract terms and to initiate legal proceedings to recover the debt.

The National Credit Code: A Comprehensive Framework

The National Credit Code, a crucial component of the National Consumer Credit Protection Act 2009 (Cth), extensively addresses the assignment of debt. It outlines the responsibilities of all credit lenders, providing a comprehensive framework for debt assignment and recovery.

Debtor Confusion and Legal Challenges

For debtors, the collection of assigned debts can often lead to confusion. While written notice of the assignment is a requirement, this notice extends only to the last known address (or last provided address) of the debtor. Many debtors are not familiar with the concept of debt assignment and often have not scrutinized the details of their credit contracts. As a result, an assignee who initiates legal proceedings to recover an outstanding balance may encounter significant obstacles.

In legal matters related to assigned debts, the case of Clark v Gallop Reserve Pty Ltd [2016] QCA 146 serves as an illustrative example. In this case, the validity of the Westpac Bank Corporation’s Deed of Assignment was challenged, as it did not explicitly include the judgment debt in the description of the outstanding debt owed to Westpac.

Philip McMurdo JA, in his judgment, emphasized that the wording “Westpac assigns to the Transferee all of Westpac’s full, absolute and entire legal and beneficial interest, right and title in and to the Westpac Debt, the Westpac Finance Documents, and the Westpac Guarantees” was sufficient to encompass the judgment obtained by Westpac before assignment. This exemplifies the court’s acknowledgment of the validity of the debt assignment and the assignee’s right to enforce the judgment debt.

Enforcement Options for Assignees

Once a debt has been validly assigned (following the absolute written assignment and proper notice to the debtor’s last known residence), and there are no offsetting claims available to the debtor, the assignee is entitled to pursue legal steps to recover the outstanding debts. These enforcement options may include:

  • Commencing legal proceedings
  • Obtaining judgments
  • Enforcing judgments through methods such as statutory demands, bankruptcy notices, creditors’ petitions, warrants for property seizure and sale, garnishee orders, and more.

The RCR Recovery Team possesses extensive knowledge of various enforcement methods applicable in all Australian jurisdictions, particularly in the recovery of assigned debts. We are also well-equipped to provide guidance on the assignment of debts and the obligations that arise once such assignments occur.

If you have any inquiries or require further information on this topic, please don’t hesitate to contact RCR Recoveries at 07 3009 8444. Our legal team is ready to assist you with any questions or concerns you may have regarding the assignment and recovery of debts, ensuring that you have the necessary support to navigate these complexities with confidence.

At RCR Lawyers, we are dedicated to empowering you with the knowledge and guidance you need to effectively manage and recover assigned debts while upholding the highest legal standards.

If you have any queries in relation to the above, please contact RCR Recoveries on (07) 3009 8444 . Alternatively, you can contact us online or email us at [email protected] . 

Paul Rojas

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January 8, 2024 by Jean Kallmyr

Understanding Deed of Assignment

In the realm of legal transactions in Australia, a Deed of Assignment holds significant importance. This legal document serves as a powerful tool for the transfer of rights and obligations between parties. Whether in the context of real estate, intellectual property, or other contractual agreements, a Deed of Assignment plays a crucial role in facilitating the seamless transfer of assets.

Deed of Assignment

A Deed of Assignment is a legally binding document that allows one party, known as the assignor (the party relinquishing the rights, benefits, or obligations), to transfer specific rights, benefits, or obligations to another party, referred to as the assignee (the party receiving the assigned rights, benefits, or obligations).

This legal instrument is commonly employed when there is a need to assign contractual rights, such as in real estate transactions, business sale transactions, intellectual property transfers or the assignment of debts. The deed must be properly executed and delivered to be legally effective.

Key Clauses of Deed of Assignment

A clear and concise description of the intention to assign, the rights, benefits, or obligations being transferred should be outlined in the document.

In many assignments, there is a consideration involved, which refers to the value exchanged between the parties. This could be in the form of money, services, or any other agreed-upon consideration.

The assignor typically provides assurances that they have the legal right to transfer the specified rights and that these rights are free from any encumbrances, and the assignee normally guarantees to perform specific contractual obligations under the specified rights.

Covenants are promises made by one or both parties regarding their future actions. For example, the assignor may covenant that they will not interfere with the assigned rights after the transfer and the assignee covenants that it will take over the obligations of the assignor under a specific contract.

The indemnity clause outlines the responsibilities of the parties in case of any losses or liabilities arising from the assignment. For example, it specifies which party will bear the costs associated with legal challenges or disputes.

Common Uses in Australia

Real estate transactions.

Deeds of Assignment are commonly used in the transfer of property rights, for example, in the sale of off-the-plan properties or when a buyer wants to transfer their rights under a property contract to another party.

Intellectual Property

Artists, authors, or inventors may use Deeds of Assignment to transfer their intellectual property rights, such as trade marks, copyrights or patents, to another individual or entity.

Debt Assignment

Assignments of debts are also facilitated through Deeds of Assignment. This occurs when a creditor transfers their rights to collect a debt to another party.

Contractual Agreements

Businesses often use Deeds of Assignment to transfer contractual rights and obligations when there is a change in ownership or a need to delegate specific responsibilities, for example, the assignment of leases or supplier contracts.

The IP House Lawyers has assisted many of our clients in drafting, preparing and executing various forms of Deed of Assignment. Please contact us on the details below if you need any assistance in relation to drafting and preparing a Deed of Assignment.

For any further information or queries on the above content, please contact us.

Jean Kallmyr | Lawyer, The IP House Lawyers | t: 0435 799 831 | e: [email protected]

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The information and contents of this publication do not constitute any legal or financial advice. This publication is intended only for reference purposes for The IP House Lawyers’ clients and prospective clients.

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Assignment of debts, statutory demands and offsetting claims

It is not uncommon for a creditor (assignor) to transfer their right to receive payment of a debt (assignment) to a third party (assignee). The assignee will then seek payment from the debtor.

The assignee of the debt can issue to the debtor company a statutory demand for the payment of the debt if the debt exceeds the statutory minimum, which is currently $2,000.

For the assignee issuing the statutory demand, there will be threshold issues as to whether notice of the assignment has been given to the debtor and whether appropriate details of the assignment are contained in the statutory demand.

Assignee has the same rights and obligations as the assignor

The assignee of the debt takes the assignment subject to the rights and obligations of the assignor.

This was demonstrated in the recent decision of Mascarene Pty Ltd v Slater [2016] VSC 395 relating to a building dispute.

In Mascarene a judgment debt was assigned and the assignee issued a statutory demand.

The Court held that the assignee was not prevented from seeking payment of interest as it had the same rights as the assignor, as if the assignment had not taken place.

However, the assignee also took the assignment subject to the obligations that would have applied to the assignor in respect of the debt.

In seeking to set aside the statutory demand the debtor company claimed it had an offsetting claim against the assignor for reinstatement costs relating to building works.

Although the assignee was not a party to the building contract and not personally liable for the reinstatement costs, the debtor company was successful in claiming the setoff and reducing the amount of the statutory demand by the amount of the reinstatement costs.

It is clear that an offsetting claim cannot be sidestepped by assigning the debt.

The assignee of a debt receives the benefit of the debt subject to the rights of the assignor but also subject to the assignor’s obligations in respect of the debt.

A statutory demand can be issued in respect of an assigned debt however the assignment does not prevent the debtor company from disputing the existence or amount of the alleged debt or seeking to raise an offsetting claim.

If you would like more information about these issues, please contact Graham Roberts on +61 7 3231 2404.

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Deed of assignment of debt

  • Deed of assignment of debt

This document is a deed of assignment of debt.

An agreement that transfers one party’s rights in a contract but not its obligation or liabilities to a third party is called an assignment.

When advising a party who wishes to assign their rights under an agreement to a third party, it is important to:

  • have a clear understanding of the laws relating to assignment; and
  • review the initial agreement to consider whether the assignor is entitled to assign their rights. If they are, whether these assignment rights are unfettered or restricted. For example, in many contracts a party is required to obtain the written consent of the third party in order to assign rights created under the contract.

This precedent can be used for the assignment of simple contract debts, specialty debts and judgment debts. It can also be readily adapted to apply to an equitable assignment of part of a debt.

Deed or contract

An assignment of rights does not need to be set out in the form of a deed like this precedent. However, in order for any undertakings in the instrument to be enforceable against the assignor, the assignee will either have to:

  • provide valuable consideration to the assignor in which case the assignment of rights can be recorded in a contract; or
  • if the assignee does not provide valuable consideration then the assignment must be recorded in a deed.

Notice to the debtor

Notice of the assignment should be given to the debtor and, where the benefit of a guarantee securing payment of the debt is also being assigned, to the guarantor as soon as possible.

Power of attorney

The power of attorney in clause 3 is desirable where:

  • part of a debt is being assigned: except in Western Australia, a statutory assignment of part of a debt is not possible with the result that the assignee is unable to sue for the debt in his or her own name; and
  • a judgment debt is being assigned: while a statutory assignment of a judgment debt carries with it the right to enforce the judgment debt, it does not, of itself, give the assignee the right to control the proceedings relating to any appeal from the judgment giving rise to the judgment debt. See Gould v Skinner [1983] Qd R 377 at 389.

The stamp duty implications of the assignment should be considered.

Related precedents

  • Basic loan agreement
  • Guarantee of payment of loan
  • Real property mortgage
  • General security deed
  • Amendment and restatement agreement
  • Deed of priority
  • Forbearance of debt agreement
  • Loan agreement checklist

This document has been authored for LexisNexis by Elise Margow, Principal, Legally Speaking .

This document is prepared with the assistance of Specialist Editors Geoff Geha, Partner, Clayton Utz and Karen Lee, Principal and Consultant, Legal Know-How .

More Details about Gilbert + Tobin

Australia: Passing your assignments: Getting straight A's as an assignee of debt – lessons from the High Court

By Alexander Danne;Ros O'Mally; Stuart Cormack

As an assignee or transferee of a debt, how can you ensure complete assignment and maximise the remedies available to recover the debt (or monies representing it)?

A recent High Court decision has brought this question sharply into focus, with the Court holding that the assignment of non-contractual remedies in respect of a debt is not effective unless expressly provided for.

How does this affect you?

  • raises potential concerns for assignees or transferees of debt – whose right to non-contractual restitutionary remedies in respect of the debt may have been lost; and
  • shows the willingness of the High Court to read down broad but unspecific language – providing a reminder of the importance of express and specific drafting.

In Equuscorp Pty Limited v Haxton [2012] HCA 7, the respondents invested in tax driven blueberry farming schemes. In breach of the Companies Code of each respondent's home state, a prospectus with respect to the schemes was not registered.

Each of the respondents entered into a loan agreement with Rural Finance Pty Limited ( Rural ) to meet ongoing expenses arising from their investment in the schemes. Rural entered into an asset sale agreement and deed of assignment (the Deed ) with Equuscorp Pty Limited (the Appellant ) assigning the loan agreements and amounts owing under them. The Deed was expressed to effect an "absolute assignment" of the debt and "all legal and other remedies " (emphasis added) under the loan agreements.

Due to the scheme's breach of the Companies Code the loan agreements were unenforceable. As an alternative to claiming under the loan agreements, the Appellant sought restitution of the funds advanced to the respondents as "money had and received". This left two issues for the Court to resolve:

  • whether the remedy of restitution is capable of assignment; and
  • if the remedy was assignable, had it been effectively assigned by the Deed?

At first instance, the Court accepted both that restitution could be and was effectively assigned to the Appellant. The Court of Appeal overturned this decision, holding that restitution had not been available to Rural (as the assignor) and therefore was not available to the Appellant (as the assignee) and that in any event, it had not been effectively assigned by the Deed.

The Court's decision

In dismissing the appeal, the High Court made the following rulings by majority 1 :

  • the remedy of restitution, where the debt in question is unenforceable, is capable of assignment2; and
  • the assignment by the Deed of the loan agreements and "all legal and other remedies" under them, only transferred to the Appellant the legal right to the debt together with legal remedies for the enforcement of the loan agreements. The alternative action of restitution was not seeking to enforce the loan agreements, but rather to utilise a separate restitutionary remedy arising from the money had and received by the respondents. This right to restitution was not assigned to the Appellant under the Deed. 3

In reaching its decision, the High Court referred to an 1888 English decision 4 on the interpretation of s25(6) of the Judicature Act 1873 , a precursor and equivalent section to s199 of the Property Law Act 1974 (QLD). In the immediate case, the Court noted that such legislative provisions were the source of the "all legal and other remedies" language in the Deed. The High Court followed the treatment of this language set down by the 1888 English decision, noting the "inherent limitations" of the language and that it was "not apt to encompass non-contractual claims for restitutionary relief".

In a commercially minded but unfortunately dissenting decision, Heydon J's more practical approach, provided that the commercial intent behind the words "all legal and other remedies" was, in the context of an assignment of debt, to convey all means by which it might have been necessary for the Appellant to recover the economic equivalent of the debt, including through a claim for restitution for money had and received. 5

How can you protect yourself?

To ensure you are protected as an assignee of debt in the event the assigned loan contract turns out at a later date to be unenforceable, assignment clauses must provide for the express assignment of non-contractual rights (including for restitutionary relief) in respect of money had and received.

1 Majority judgment by French CJ, Crennan J and Kiefel J. 2 Equuscorp Pty Limited v Haxton [2012] HCA 7 at 53. 3 Equuscorp Pty Limited v Haxton [2012] HCA 7 at 63-64. 4 Read v Brown (1888) 22 QBD 128 at 132. 5 Equuscorp Pty Limited v Haxton [2012] HCA 7 at 161.

This publication is intended to provide a general information only and should not be relied upon as giving legal advice. For legal advice on a specific issue, please contact one of the lawyers at Gilbert & Tobin

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Legal Requirements for a Deed of Assignment

Home > Uncategorized > Legal Requirements for a Deed of Assignment

  • April 19, 2023

If you're involved in the transfer of contractual rights and obligations, a deed of assignment can be an essential legal document . It provides a framework for transferring your rights or taking over someone else's. But creating a valid deed of assignment involves more than just filling out a form. To ensure your deed of assignment is legally enforceable, it's crucial to understand the legal requirements and considerations involved. In this article, we'll guide you through the key legal requirements and considerations when drafting and executing a deed of assignment.

Table of Contents

Key Legal Requirements

Written agreement.

One of the essential legal requirements for a valid deed of assignment is that it must be in writing. The written agreement must clearly state the intentions of both parties and the terms of the transfer. A written agreement helps to avoid any misunderstandings or disputes that may arise in the future.

A written deed of assignment should include the following details:

  • The date when the deed of assignment was executed
  • The names and addresses of the parties involved
  • A description of the property or right being assigned
  • The consideration or payment for the assignment
  • Any terms or conditions of the assignment

Signature of the Parties

Another crucial legal requirement for a valid deed of assignment is that it must be signed by all parties involved in the transfer. The signatures of the parties show their agreement to the terms and conditions of the transfer. If any party does not sign the deed of assignment, it will not be valid.

It is essential to ensure that the signatures are witnessed by an independent third party. The witness should be a person who is not a party to the deed and is over 18 years of age. The witness must sign the deed as well, and their name and address should be recorded in the deed of assignment.

Notice to the Other Party

In some cases, a deed of assignment may affect the rights of another party who was not involved in the original contract . In such cases, it is essential to provide notice to the other party before executing the deed of assignment.

The notice should include the following details:

  • The date of the deed of assignment

The notice should be sent to the other party using a method that provides proof of delivery, such as registered mail or courier service.

Compliance with Local Laws and Regulations

 related content: step-by-step guide to drafting deed of assignment, legal considerations, properly identifying parties and rights.

One of the key legal considerations when creating a deed of assignment is properly identifying the parties and the rights involved. The validity and enforceability of the assignment hinge on accurately identifying the original parties, as well as those who will assume the obligations and benefits under the assignment. It’s also important to clearly define the rights being assigned, including any limitations or conditions. Failure to properly identify the parties or rights could lead to legal disputes and financial losses. It’s crucial to seek legal advice to ensure the parties and rights are accurately identified to avoid any legal issues.

 Related Content: Benefits of a Deed of Assignment

Seeking Legal Advice

It’s crucial to seek legal advice when drafting a deed of assignment. A legal professional can guide you through the process, ensuring compliance with legal requirements and accurately identifying the involved parties and their rights. With their expertise, you can avoid potential legal disputes and financial losses arising from an invalid or unenforceable assignment. They can also provide valuable advice on other legal considerations related to the assignment. Seeking legal advice is vital to ensure a legally valid, enforceable, and compliant deed of assignment. 

deed of assignment of debt australia

In conclusion, a valid deed of assignment requires a written agreement, the signatures of all relevant parties, notice to the other party, and compliance with local laws and regulations. It is also important to accurately identify the parties and rights involved and seek legal advice if needed. By following these legal requirements and considerations, homeowners and other parties can ensure a smooth and successful transfer of rights. 

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Debt Assignment in Queensland – A Complete Guide

Home » News & Articles » Debt Assignment in Queensland – A Complete Guide

NEWS & ARTICLES

  • By Wayne Davis
  • | September 17, 2023

Article Summary

A debt assignment is an agreement where a debt, along with all its associated legal rights and responsibilities, is transferred from the original creditor to a third-party purchaser. Once verified, the third party, now termed the assignee, becomes the official owner of the debt and has the right to collect it.

A “chose in action” or a “thing in action” is a legal term referring to a personal or proprietary right in intangible personal property, enforceable through litigation. This is different from “chose in possession”, or a “thing in possession” which refers to tangible items one can physically possess, like a book or car.

The legislation in Queensland, specifically the Property Law Act 1974 (Qld), provides for assignments of things in action.

An absolute debt assignment refers to the unconditional transfer of property or rights, ensuring the original owner retains no interest. The assignment should be complete for clarity between the debtor and the new creditor.

Before the new creditor can collect the debt, a formal notice must be issued to the debtor. This ensures the debtor knows they have a new creditor. Requirements for a valid notice include it being in writing, signed by the assignor, and containing clear identification of the assignor, assignee, and the debt.

The responsibility of ensuring a valid notice falls on the assignee. Several guidelines and legal cases have highlighted the importance of serving the notice in a manner that is most likely to bring it to the debtor’s attention. This could involve registered post or personal delivery.

Once the debt is effectively assigned and the debtor notified, the assignee can collect the debt and undertake any necessary legal actions. Often, debts that are assigned come with their own challenges, as many are sold precisely because they are problematic.

Legal avenues like court proceedings, enforcement warrants, or bankruptcy can be pursued. Challenges may arise due to misunderstandings by the debtor, disputes about the validity of the assignment, or challenges proving effective delivery of the notice to the debtor.

Table of Contents

Are you a creditor in Queensland who is struggling with debt assignment and is looking for a way to effectively manage the assignment of their debts?

Dealing with debt can sometimes be a lot for creditors to manage. Between the multiple debts that their business will likely manage and potential problem debtors who don’t seem to want to pay their debt, debts can sometimes spiral out of control!

If this is the case for you or your business, it may be time to consider assigning your debt.

The assignment of a debt occurs when the creditor of a debt sells their debt to a third-party buyer. This process can be complicated to understand, so it is important that you perform due diligence and research before engaging in this process.

Typically seen with banks and credit card companies, creditors will sometimes package their debts into debt books or tranches and sell them, rather than collecting them.

In this article our debt recovery lawyers will discuss the basics of debt assignment in Queensland so that you, as a creditor, can better understand this process.

What is a Debt Assignment?

The first question that is to be asked about debt assignment is what it is and how it works?

A debt assignment is an agreement that transfers a debt , and all of the legal rights and responsibilities associated with it, from the creditor to a third-party purchaser.

This provides the third party with the right to collect the debt, while the creditor can no longer engage in the debt recovery process with the debt assigned.

Once an assignment of debt is verified, the rights will be transferred to the assignee and they will be the official owner of the debt, meaning that they can collect the debt for the money it is worth.

Chose in Action (Thing in Action)

The right to recover a debt is a “thing in action” or a “chose in action”.

A “chose in action” (often referred to as a “thing in action”) is a legal term that denotes a personal right without possession, or a proprietary right in personal property that is intangible and not in one’s possession, but enforceable through litigation.

Common examples of choses in action include debts, shares in a company, and other rights to receive something or have something done.

Contrast this with “chose in possession” which refers to something tangible that one can physically possess, like a book, a car, or money.

The phrase “chose in action” originates from old French and the term “chose” means “thing”.

In Queensland, the assignments of things in action are provided for in legislation, particularly at section 199 of the Property Law Act 1974  (Qld) (“ the PLA ”).

Section 199 of the Property Law Act

Section 199(1) of the PLA states:

(1) Any absolute assignment by writing under the hand of the assignor (not purporting to be by way of charge only) of any debt or other legal thing in action, of which express notice in writing has been given to the debtor, trustee or other person from whom the assignor would have been entitled to claim such debt or thing in action, is effectual in law (subject to equities having priority over the right of the assignee) to pass and transfer from the date of such notice— (a) the legal right to such debt or thing in action; and (b) all legal and other remedies for the same; and (c) the power to give a good discharge for the same without the concurrence of the assignor.

This part of the section means that a the right to recover a debt (being a thing in action) can be legally assigned. This assignment must be absolute and the debtor should receive a written notice, and obtaining the debtor’s consent for this assignment is not mandatory.

Section 199(2) of the PLA states:

(2) If the debtor, trustee or other person liable in respect of such debt or thing in action has notice— (a) that the assignment is disputed by the assignor or any person claiming under the assignor; or (b) of any other opposing or conflicting claims to such debt or thing in action; the debtor may, if the debtor thinks fit, either call upon the persons making claim to the debt or other thing in action to interplead concerning the same, or pay the debt or other thing in action into court under and in conformity with the provisions of the Act s relating to relief of trustees.

This part of the section says that if the debtor knows of disputes or conflicting claims regarding the assignment, they can either request claimants to clarify their stance or deposit the owed amount in court as per the Act’s guidelines.

These subsections raise some further questions, namely:

  • What is an “ absolute debt assignment ” at law?
  • What is a notice of debt assignment?

We will discuss these in further detail below.

What is an “Absolute Debt Assignment” at Law?

Absolute debt assignment refers to an unconditional transfer of property or rights, leaving no interest for the original owner.

Typically, it lets a creditor transfer their right to collect a debt to a third party. The debt assignment must be complete and without conditions for the benefit of both the debtor, who knows whom to pay, and the third party, who can legally claim the debt.

In Durham Brothers v Robertson [1898] 1 QB 765 , it was held that the document was not “an absolute assignment (not purporting to be by way of charge only)” and that the plaintiffs could not recover in the action. This was held because it was a charge. The Court said:

The document purports on the face of it to assign the debt, and it is not the less an absolute assignment because it contains, like any other mortgage, provisions that shew that it is only a security, and that there is a right to redeem. It is clear on the authorities that a mortgage with a power of redemption is an absolute assignment within the section.

In Clyne v Deputy Federal Commissioner of Taxation (1981) 150 CLR 1 , Mason J said at [24]:

An “absolute assignment” in the section signifies one which is unconditional.

In Austino Wentworthville Pty Limited v Metroland Australia Limited [2013] NSWCA 59 , Barrett JA said at [62], summarising the relevant principles emerging from the cases:

An “absolute” assignment is one that is unconditional and does not attempt to affect part only of the chose in action. The fact that an assignment otherwise absolute is accompanied by an express proviso for redemption, an implied right of redemption or the creation of a trust in respect of future proceeds does not deprive it of its absolute character. An assignment by way of charge is one the effect of which is to give a right of payment out of the subject matter assigned without outright transfer of that subject matter. Such an assignment occurs when, for example, there is a transfer of a right to be paid out of a particular fund or of so much of a debt as is sufficient to satisfy a future indebtedness. The character of the assignment must be ascertained from the terms and effect of the instrument, according to the construction of it as a whole.

So, to ascertain if the assignment is an absolute assignment, reference must be made to the contract (or deed of assignment), its terms and conditions, and read in the proper context.

Another requirement for an assigned debt to be valid is that the assignee must send a notice to the debtor.

What is a Notice of Debt Assignment?

Before the debt will be able to be collected by the new creditor, a notice of debt assignment must first be issued to the debtor. But what is this and what does it mean?

A notice of debt assignment is a formal notice that is issued to the debtor when a debt is assigned to a new creditor. The new creditor, or the assignee, must issue this notice to the debtor at their last recorded or known home address.

As a debtor, it is a sudden change to have a new creditor to whom they are making payments.

There may have to be a process of them switching details and making financial or legal arrangements to begin to make payments or to manage the debt in any other way of their choosing.

They should be provided the time to understand that they now have a new creditor, as this will likely be an unexpected change, and deal with their debt in the way that they choose, as they may have had previous arrangements or discussions with their initial creditor.

The purpose of the notice is to provide the debtor with this new information and to ensure that they begin making debt payments to the new creditor, rather than continuing to pay the previous creditor.

In Walter and Sullivan Ltd v J Murphy and Sons Ltd [1955] 1 All ER 853 , the court held that the following are the requirements of a valid notice of an assignment of a debt:

  • The notice must be in writing.
  • The notice must be signed by the assignor.
  • The notice must identify the assignor and the assignee.
  • The notice must identify the debt that is being assigned.

In Mango Boulevard Pty Ltd & Anor v Mio Art Pty Ltd & Ors [2016] QCA 148 , Fraser JA said at [34] citing the relevant authorities:

… to constitute valid notice, there must be some kind of formal notification by the assignee, or possibly by the assignor on his behalf, to the debtor in order to achieve the object described in the Walter & Sullivan case. This view is also consistent with the decision of the Court of Appeal in Talcott v John Lewis & Co Ltd [1940] 3 All ER 592, where it was held that a notice stamped by a creditor on his invoice stating that the invoice should be transferred and payment made to the assignee, was ineffective, both because it was insufficiently plain in its wording, and because it was not a notice sent by the assignee to the debtor.

Therefore, we would suggest that at a minimum, the written notice of debt assignment should include:

  • A notice that it is an assignment of debt.
  • The name and details of the assignor of the debt (old creditor).
  • As many particulars of the original debt to enable the debtor to identify the debt to which the notice relates.
  • All of the details of the assignee of the debt (new creditor).
  • Direction to pay the debt to the assignee and the new payment details.
  • Full particulars of the original debt amount, plus and costs and interest incurred.
  • How the debtor can discharge the debt by payment.
  • The assignment must be signed by the assignor.

It is important to note that the assignment does not need to be in any particular format.  However, it is advisable to have a lawyer draft the assignment to ensure that it is valid and enforceable.

After you have a valid assignment contract or deed of debt assignment signed; and you have a valid notice of assignment drafted, you must now give the notice of debt assignment to the debtor.

Proper Service of the Notice of Assignment of Debt

The notice must be valid, and it is the responsibility of the assignee to ensure that the notice is valid. The notice of assignment must be absolute and in writing, and the new creditor (or old creditor) must ensure that the notice is delivered properly to the debtor.

Section 347 of the Property Law Act 1974 (Qld) sets out the general rules for serving notices under the Act.  A notice may be served on a person:

  • By delivering it personally to the person.
  • By leaving it at the person’s usual place of abode or business.
  • By posting it as a letter addressed to the person at their usual place of abode or business.

If the person is unknown or absent from the State, the notice may be served in such manner as directed by the court.

The Act also provides that a notice posted as a letter shall be deemed to have been served, unless the contrary is shown, at the time when by the ordinary course of post the notice would be delivered.

In Anning v Anning (1907) 4 CLR 1049 , Griffith CJ said of the then equivalent of s 199(1) that:

The section does not say by whom the notice is to be given, but it is, I think, clear that it may be given either by the assignor or the assignee.

In Grayprop Pty Ltd v Maharaj International Pty Ltd [2001] QSC 387 , it was held that the posting of a notice to a post office box did not comply with s.347 so as to attract the deeming provisions in that section relating to receipt of the notice. In that case Philippides J referred to David Sarikaya v Victorian Workcover Authority [1997] FCA 1372 , where Black CJ held:

… a post office box is not, in my view, the “address of a place” at which a document may be “left” for a person. The ordinary notion of “post office box” is of a container at a post office into which mail that has been duly posted is placed by postal authorities for retrieval by or on behalf of the holder of the box. Whether or not such a box is, in this context, the “address of a place”, it is not the address of a place at which a document may be “left” by way of service.

In Walter and Sullivan Ltd v J Murphy and Sons Ltd [1955] 1 All ER 853 , the court held that notice of an assignment of a debt must be given to a debtor in a way that is reasonably likely to bring it to their attention.

In the case, the assignor had given the debtor notice of the assignment by sending a letter to their registered office. However, the debtor had moved office and the letter was never received.

The court held that the notice was not valid because it had not been given in a way that was reasonably likely to bring it to the debtor’s attention.

Therefore, some takeaways re. service include:

  • To give valid notice of an assignment of a debt, the notice must be given to the debtor in a way that is reasonably likely to bring it to their attention.
  • This may involve sending the notice by registered post or delivering it in person.
  • It is not enough to simply send the notice to the debtor’s registered office if the debtor has moved office and the notice is not received.

Enforcing an Assigned Debt

The debt has been assigned effectively and the notice has been delivered to the debtor. Now what?

The assignee is now entitled to collect the debt and to take any collection or legal action of their choosing.

As debts that are assigned are often somewhat problematic, as many sell problematic debts, legal action may be the choice that many take.

Commencing court proceedings and receiving and enforcing a judgement are some of the recovery options that assignees will have in the legal regard, such as enforcement warrants, bankruptcy , and issuing a statutory demand / winding up .

The recovery of an assigned debt can often raise several issues for assignees in the initial stages. There are several factors and occurrences that may cause these issues to arise, including:

  • Misunderstanding of the debt assignment process by debtors, resulting in confusion or refusal to pay, as they do not understand that they are paying their debt or the same debt as before.
  • As we have discussed, a debt assignment must be legal and valid. The debtor may raise a dispute regarding the validity of the assignment of debt, regardless of whether proper procedure was followed or not.
  • You must be able to prove that the notice of assignment was effectively validly provided to the debtor. If you have failed to keep proper records of the formation and delivery of the notice, you may struggle to prove that it was both valid and provided.
  • If the debtor had previously arranged any kind of understanding with the assignor, they may be able to take action against you for not fulfilling the arrangement, even if you were not notified about it before the sale. This, however, may constitute a breach of contract by the assignor, so you may be able to take action of your own if this turns out to be the case.

Benefits of Debt Assignment

There are several benefits for all parties involved in the assignment of debt, including;

For the Assignor:

The assignor, or the individual or party that is assigning the debt to a new creditor, benefits in several ways and circumstances by selling the debt.

For one, they will have an increased cash flow by being paid a larger piece of the debt in one payment, rather than smaller payments over an extended period, which can help them get their finances back on track or invest in their business.

They will also no longer have the risk of a debt, which may be unable to be collected due to insolvency or other reasons, mitigating risk from their business.

Furthermore, the time and resources spent dealing with the debt will no longer be required, freeing up their business resources for alternative use.

For the Assignee:

The assignee, or the new creditor of the debt, will also be privy to several benefits from the assignment of debt process.

As a debt purchaser , the chances are they will have access to resources or be experienced debt collectors who have the time and resources to focus on debt collection , increasing their chances of being paid.

They will also pay less than the debt is worth for the rights to collect it, leaving room for a large profit margin.

What to Consider in Debt Assignment

While there are many benefits that may be reaped from a debt assignment on either side of the matter, there are also some considerations that should be made.  They include;

The assignor of the debt should consider if this process is the right one for them and their business. After all, if the debt was collected regularly, they would collect more money over time, rather than being paid a larger amount of the debt immediately but not the full amount at any point in time.

The suitability of assigning a debt is something that can only be decided based on the specific circumstances of the matter and of the assignor’s business, so they should take the time to consider.

If the assignor wishes to maintain a relationship with this debtor for any reason, they should also consider notifying the debtor separately.

The assignee of the debt has several considerations to make, also regarding the suitability of this process for them. They will be taking on the responsibility of collecting a debt, which can take time and resources, so this must be feasible for them to commit to.

They are also accepting the risk of not being paid the debt at all or receiving only a small amount of it, so this must be a consideration made.

There is also a process that must be followed once the debt has been assigned, as discussed, so this should be considered as something that must be completed.

Limitation Dates for Assigned Debts

An assignee of debt must ensure that they are within the limitations of actions acts for each State and Territory to legally commence recovery of the debt.

The purpose of limitations of actions acts is to limit the delay for creditors to take action against a debtor for outstanding monies.

The limitation period for a contract debt is six (6) years in Queensland, calculated from the point of breach.

Where an assignee has been assigned a debt, the point of breach will commence from the date the debt was assigned to the assignee.

However, in some circumstances, where a debtor acknowledges the debt or makes a payment in respect of the debt, the point of breach starts from the date of acknowledgement or the last payment made by the debtor.

Common Mistakes to Avoid when Assigning Debt

There are a few things that you should avoid when assigning your debt. These include:

  • Not having a written agreement : It is important to have a written agreement in place when assigning debt. This agreement should clearly identify the debt being assigned, the assignor, the assignee, and the terms of the assignment.
  • Not notifying the debtor : The debtor must be notified of the assignment in writing. This notice should be given to the debtor before they make any payments to the assignor.
  • Assigning debt that is not assignable : Not all debts can be assigned. For example, debts that are personal in nature, such as claims for defamation or assault, cannot be assigned.
  • Failing to comply with the applicable laws and regulations : There are specific laws and regulations that govern the assignment of debt. It is important to comply with these laws and regulations to ensure that the assignment is valid.

Here are some additional tips to avoid common mistakes when assigning debt:

  • Have a lawyer review the assignment agreement : A lawyer can help you to draft an assignment agreement that is valid and enforceable.
  • Use a registered post to send the notice of assignment to the debtor : This will help to ensure that the debtor receives the notice and that there is a record of the notice being sent.
  • Keep a copy of all documentation related to the assignment : This includes the assignment agreement, the notice of assignment, and any other relevant documents.

If you have any questions about assigning debt, you should consult with a lawyer asap.

FAQ on Debt Assignment in Queensland

Navigating the intricacies of debt assignment can be complex, given its multifaceted nature and the legal implications involved.

Whether you’re an assignor looking to transfer the rights to a debt or an assignee aiming to comprehend the dynamics of your new responsibility, it’s crucial to understand the entire spectrum of the process.

A debt assignment is a legal transfer of a creditor’s right to collect a debt to a third party, known as the assignee. Once assigned, the original creditor can no longer engage in the debt recovery process.

What is a “Chose in Action”?

A “chose in action” refers to a legal right without possession, like debts or shares in a company. It contrasts with “chose in possession,” which refers to tangible items like a car or book.

What does Section 199 of the Property Law Act 1974 (Qld) discuss?

It provides the legal framework for the assignment of things in action in Queensland, specifying that for a debt assignment to be valid, a written notice must be given to the debtor.

Do I need the debtor’s consent to assign the debt?

No, the debtor’s consent isn’t mandatory. However, they should receive a written notice of the debt assignment.

What is an “Absolute Debt Assignment” at law?

It refers to an unconditional transfer of rights, meaning the original owner retains no interest. This transfer allows the third party (assignee) to legally claim the debt.

What should a Notice of Debt Assignment include?

It should provide details about the original creditor, the assignee, specifics of the debt, payment instructions, legal implications, and the dates of assignment and notice.

Why is the notice important?

It’s a legal requirement for the assignment to be effective, ensures clear communication with the debtor, protects the assignee’s rights, and prevents potential disputes.

A Notice of Debt Assignment is a formal document sent to a debtor informing them that their debt has been transferred to a new creditor (assignee). This notice ensures the debtor makes payments to the new creditor rather than the original one.

Why is a notice of assignment of debt necessary?

It allows the debtor to understand and adapt to the unexpected change in the party to whom they owe money. It also gives them time to arrange their finances or change any existing agreements made with the original creditor.

What are the requirements for a valid Notice of Debt Assignment?

Based on legal precedents for a Notice of Debt Assignment to be valid it must be in writing; It should be signed by the original creditor (assignor); and it should identify both the assignor and the assignee; and the specific debt being assigned must be detailed.

What should be included in a well-drafted Notice of Debt Assignment?

A well-drafted Notice of Debt Assignment should include a statement clarifying it as an assignment of debt; details of the assignor (original creditor) and the assignee (new creditor); comprehensive information on the original debt, including any additional costs and interest; instructions on how to make payments to the new creditor; the method to finalise the debt payment; and the signature of the assignor.

How should the notice be served to the debtor?

For effective service, the notice should be personally delivered to the debtor; or left at their usual residence or place of business; or posted as a letter to their regular address. However, precautions should be taken regarding post office boxes as they might not comply with certain legal provisions.

What are the implications if the notice isn’t properly served?

A notice must be delivered in a manner that makes it likely to come to the debtor’s attention. Improper delivery can render the notice invalid. For instance, merely sending it to a moved office or a post office box might not suffice.

Does the format of the assignment need to be specific?

No, there isn’t a mandatory format. However, having a lawyer draft the notice ensures its validity and enforceability.

Who can issue the Notice of Debt Assignment?

Either the assignor or the assignee can issue the notice.

What does it mean when a debt is assigned?

When a debt is assigned, it means the original creditor (assignor) has transferred their rights to collect the debt to a new creditor (assignee). This transfer requires a formal notice to be given to the debtor.

After a debt has been assigned, who is responsible for collecting it?

The assignee, or the new creditor, is now responsible for collecting the debt. They can choose any legal collection method, which might include court proceedings.

What issues might arise after the assignment of a debt?

Issues can arise from misunderstandings by the debtor, challenges to the validity of the assignment, lack of proper documentation to prove the notice was provided, or previous agreements with the assignor that were not known by the assignee.

How does the assignor benefit from assigning a debt?

Assignors can benefit from an immediate influx of cash, reduction in the risk of non-collection, and a decrease in time and resources spent on collection efforts.

How does the assignee benefit from purchasing an assigned debt?

Assignees typically purchase debts at a reduced rate, giving them a chance for a higher profit margin upon collection. Additionally, experienced debt collectors might have the resources and expertise to effectively recover debts?

Are there any considerations to be made before assigning or accepting a debt?

Yes. Assignors should evaluate if debt assignment is suitable for their business situation and consider notifying the debtor separately. Assignees must weigh the commitment of resources against the potential risk of non-collection and ensure they understand and follow the necessary post-assignment processes.

Is there a time limit for the assignee to take action on a debt?

Yes. The limitation period for a contract debt is typically six years from the point of breach. However, this might vary if the debtor acknowledges the debt or makes a payment.

Are there common mistakes made during debt assignments?

Some common pitfalls include not having a written agreement, failing to notify the debtor, assigning non-assignable debts, and not adhering to relevant laws and regulations.

How can I ensure that the assignment process goes smoothly?

It’s advisable to consult with a lawyer, use registered post for notices, and keep thorough documentation of every step in the process.

Can all debts be assigned?

No. Some debts, especially those personal in nature like claims for defamation or assault, cannot be assigned. Always check the nature of the debt and legal stipulations before proceeding.

Wayne Davis

Disclaimer:  The content on this website is intended only to provide a general summary of information of interest. It is not intended to be comprehensive nor does it constitute legal advice. We attempt to ensure that the content is current but we do not guarantee its accuracy. You should seek legal or other professional advice before acting or relying on any of the content of this website. Your use of this website or the receipt of any information on this website is not intended to create nor does it create a solicitor-client relationship.

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12 Assignments of debts and choses in action

Any absolute assignment by writing under the hand of the assignor (not purporting to be by way of charge only) of any debt or other legal chose in action, of which express notice in writing has been given to the debtor, trustee, or other person from whom the assignor would have been entitled to receive or claim such debt or chose in action, shall be, and be deemed to have been effectual in law (subject to all equities which would have been entitled to priority over the right of the assignee if this Act had not passed) to pass and transfer the legal right to such debt or chose in action from the date of such notice, and all legal and other remedies for the same, and the power to give a good discharge for the same without the concurrence of the assignor: Provided always that if the debtor, trustee, or other person liable in respect of such debt or chose in action has had notice that such assignment is disputed by the assignor or anyone claiming under the assignor, or of any other opposing or conflicting claims to such debt or chose in action, the debtor, trustee or other person liable shall be entitled, if he or she thinks fit, to call upon the several persons making claim thereto to interplead concerning the same, or he or she may, if he or she thinks fit, pay the same into court under and in conformity with the provisions of the Acts for the relief of trustees.

SLF Lawyers

Bankruptcy & Insolvency News SLF Lawyers News Is Your Notice Assignment of Debt Valid? May 25, 2020

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A creditor (assignor) can transfer their rights to receive and seek payment of a debt to a third party (assignee). Once the transfer of their rights has occurred, the assignor can then seek payment of that debt from the debtor. Once assigned, the assignee has the legal right to such debt and has the power to give a good discharge of it  without the concurrence of the assignor. [1]

There are two factors that an assignee must consider before attempting to recover a debt from a debtor:

SERVICE OF THE NOTICE

The assignee must issue a notice of assignment of debt (“ Notice ”) to the debtor at the debtors last known residential address. This is where the confusion and issues around the service of the Notice can occur by the debtor. Generally, a bank will assign the debt to a collection company after years of attempting collection/locating debtor. It is at this stage that the debtor may have moved residential addresses and may not receive the Notice. The assignee is required to comply with section 347 of the  Property Law Act 1974  (Qld), whereby service of any notices must be made to the person’s last known place of abode.

STATUTE OF LIMITATIONS

An assignee must ensure that they are within the statue of limitations to legally commence recovery of the debt. The purpose of a statute of limitations is to limit the delay for creditors to take action against a debtor for outstanding monies. The limitation period for a contract debt is six (6) years, calculated from the point of breach. Where an assignee has been assigned a debt, the point of breach will commence from the date the debt was assigned to the assignee. However, in some circumstances, where a debtor acknowledges the debt or makes a payment in respect of the debt, the point of breach starts from the date of acknowledgement or the last payment made by the debtor.

SLF Lawyers specialises in legal recoveries and various enforcement options and can assist in providing advice with respect to ensuring the Notice has been issued correctly.

If you have any questions, please contact Partner – Mark Smith of SLF Lawyers Brisbane on (07) 3839 8011.

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Assignment of Debt

by Kafrouni Lawyers | Sep 8, 2018 | Contracts & Negotiations , News , Risk Management |

What is it?

An assignment of debt is an agreement that transfers a debt, and all of the legal rights and obligations attached to it, from the creditor to a third party. The third party may be an individual or a company, such as a debt collection agency.

Application for small business people

Small business people may find themselves owing money to people that they have worked with, such as suppliers. In certain situations, particularly if the small business owner has been delayed in making repayments, the debt may be assigned to a new creditor. The small business owner will still be liable to pay the outstanding amount, but they will be now paying it to a different person or company.

When a debt has been assigned, it is essential that the debtor is adequately informed of the identity of the new creditor and how they are to make future payments. It is also a good idea for the debtor to double check that the new creditor has been given the correct information, in terms of the balance outstanding and the arrangements made for minimum monthly payments.

Small businesses may also be owed money that they are finding difficult to recover from debtors. This can be frustrating, time-consuming, and also reflect badly on the businesses asset summary. To alleviate these problems, they may wish to sell the debts to a collection agency that will be more experienced and better equipped to recuperate the payments.

It is important to be aware legislation operates in relation to the assignment of debt to protect the rights of debtors.

6 key things to consider

Prior to a debt being assigned, it is essential to consider the following six key factors:

  • Does the original contract between the parties allow for assignment?
  • Have the legislative requirements been complied with?
  • Has the debtor been informed of the assignment of debt and the new payment procedure?
  • Do the interest obligations under the original contract continue to apply?
  • Has a payment plan been agreed to with the debtor?
  • What is the consideration (payment) for the assignment and is there a warranty attached?

The information provided by Kafrouni Lawyers is intended to provide general information and is not legal advice or a substitute for it. Business people should always consult their own legal advisors to discuss their particular circumstances. Kafrouni Lawyers makes no warranties or representations regarding the information and exclude any liability which may arise as a result of the use of this information. This information is the copyright of Kafrouni Lawyers.

Liability limited by a scheme approved under professional standards legislation.

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Legal briefing - Novation and assignment of contracts

Publication date: 19 May 2017

In this issue:

What is the difference between novation and assignment?

When is a novation or assignment required and which one do you use, issues to consider when deciding whether to agree to a novation or assignment, executing the novation or assignment.

Commonwealth entities encounter a variety of situations where contractual rights and obligations may need to be transferred from one legal entity to another. This can arise where a supplier is restructuring its operations or as part of a sale of a business. In these situations, there are 2 legal tools available to achieve a transfer of rights or obligations: novation and assignment. This legal briefing sets out some key considerations for Commonwealth entities when considering a novation or assignment.

While this legal briefing looks at novation and assignment of contracts generally, additional issues can arise in the context of interests in land, such as leases – these issues are beyond the scope of this legal briefing.

The following table compares the general principles that distinguish novation from assignment. 1

Table 1: Differences between novation and assignment

A novation is the mechanism by which a contract is terminated and a new contract is made between different or additional parties. 2 The new contract is generally on the same terms as the original contract. A novation has the effect of substituting one party for another party without necessarily changing the rights and obligations under the original contract. The rights and obligations under the original contract can be transferred to the new party.

A novation requires the consent of all the parties to the original contract as well as the consent of the new party. 3 It is a tripartite agreement between the original parties and the new party. Consent of all the parties to enter into the agreement is therefore crucial. 4 A novation usually takes the form of a deed.

Example of novation

The Commonwealth and B have a contract under which B provides certain services.

B is proposing to sell its business to C. C is prepared to take on B’s obligation under the contract with the Commonwealth. The Commonwealth undertakes its due diligence and agrees to the substitution of B with C. For the substitution to occur, a novation is needed. Once the novation is signed, C is responsible to the Commonwealth for the services under the contract.

The following diagram demonstrates this novation.

Diagram 1: Transfer of both rights and obligations

Diagram 1: Transfer of both rights and obligations

An assignment is the mechanism by which a party to a contract (the assignor) transfers its existing rights and benefits under that contract to a third party (the assignee). 5 Importantly, the assignor cannot transfer its burdens, obligations or liabilities to the assignee through an assignment. 6 This means that the assignor is not released from its obligations under the contract. Further, the assignee does not become a party to the original contract but can enforce their right to receive the assigned benefits.

An assignment does not require a new contract. The assignor must only record the assignment in writing, 7 sign it and provide written notice of the assignment to the other party to the contract. At law it is possible for an assignment of rights to take place without the consent of the other party to the contract. 8 This can be problematic if the other party to the contract prefers to deal with the assignor rather than the new third party. For this reason, most Commonwealth contracts contain a clause which prevents the contractor from assigning its rights under the contract, in whole or in part, without first obtaining the written consent of the Commonwealth. Sometimes the contract will also provide that the Commonwealth is not obliged to give its consent. Sometimes, this clause will refer to the consent not being ‘unreasonably withheld’.

Example of assignment

The Commonwealth and B have a contract under which B provides consultancy services to the Commonwealth. B wants to transfer its right to receive payment for the services to a third party, C. For this to occur, B can assign its rights to receive payment under the contract to C. This can be achieved through a deed of assignment between B and C. At law, the assignment can occur without any involvement of or consent from the Commonwealth. Importantly, B continues to remain a party to the contract with the Commonwealth, so B is still obliged to perform the services and B’s contractual liabilities remain unchanged. However, the third party, C, will have a legally enforceable right to receive the Commonwealth’s payment for the services that B performs.

Although C is not made a party to the original contract between the Commonwealth and B, the practical result of the assignment is that C can enforce the right to receive payment under the contract against the Commonwealth.

The following diagram demonstrates this arrangement.

Diagram 2: Transfer of rights only

Diagram 2: Transfer of rights only

Commonwealth entities are often asked to consider requests to novate or assign agreements. These requests can arise with funding agreements, contracts for goods and services and other agreements for a variety of reasons.

Where a change to the underlying contractual arrangements is requested, the Commonwealth entity will need to consider whether the proposed change is acceptable and determine whether a novation or an assignment is most appropriate. 9

Do I use a novation or an assignment?

Is the new party taking over both rights and obligations , with the existing contractor not to have an ongoing role under the contract?

  • a novation will usually be required.

Is the new party taking over contractual rights only , with the existing contractor continuing to be responsible for performing obligations?

  • an assignment will usually be required.

The table below outlines some common situations in which the question of novation or assignment might arise.

Table 2: Circumstances that may result in a novation or assignment

When an agency is considering whether to agree to a novation or assignment, there will be a range of matters that will need to be addressed. In some cases, it may be appropriate to terminate the existing contract and undertake a new procurement or funding process.

First, the terms of the existing contract should be considered. The contract may include provisions dealing directly with novation or assignment. Many Commonwealth contracts prohibit novation or assignment without the consent of the Commonwealth entity. This allows the Commonwealth entities to carefully select their suppliers, contractors, funding recipients and other parties that they are dealing with. It is common for these contractual provisions to specify that the Commonwealth will not unreasonably withhold approval for novation or assignment. Conversely, the contract may include a standing consent 11  by the Commonwealth to certain kinds of novation or assignment (for example, within the same corporate group). Even in this case, a formal deed of novation will usually still be required.

Second, when an agency is deciding whether to agree to a novation or assignment, it may need to consider a range of approval processes and risk management requirements that apply to this commitment of relevant money. It may be necessary to check the Public Governance, Performance and Accountability Act 2013 (in particular, s 15, s 16 and ss 25–29), the Public Governance, Performance and Accountability Rules 2014 (in particular, rule 18), the accountable authority instructions and other applicable legislation that may specifically apply to the contract.

Third, although strictly not directly relevant to the novation or assignment, it is common for variations to the contract to be raised at the same time. Agencies should approach any request for a variation as part of a novation or assignment in the same way they would at any other point in the contract period.

Due diligence

The information you need will vary from case to case but might include the following.

Background entity information on the new party

  • What are the management capabilities of the entity?
  • Has the Commonwealth previously dealt with the entity?
  • Is the body a foreign entity? If so, advice may be required as to whether it has executed a binding contract.
  • Is the body a partnership or unincorporated association? If so, who will be bound by the contract following the novation?
  • Is the body the trustee of a trust? If so, does the trustee have the requisite authority under the trust deed?
  • Do you have information on any relevant ‘fit and proper person’ considerations?

Financial status information

  • How does the financial status of the new contractor compare with that of the existing contractor?
  • Should you seek a parent guarantee or other security (is the body a $2 company)?
  • Do you require independent financial advice on any figures that the new party has provided?
  • Can the new party meet the insurance requirements specified in the contract?

Evidence of the company’s ability to perform the contract

  • What is happening to any key personnel under the contract? Are they moving to the new party?
  • Will the new party have access to all relevant facilities and specialist equipment?
  • Does the new party hold all relevant licences and registrations?
  • Do you have evidence that the company will satisfy the conditions or requirements of the contract – for example, will it hold funding in a special account or satisfy milestone requirements or any relevant eligibility criteria for funding?

Proposed transitional arrangements

If it is decided that a novation or assignment will be agreed to then it may be necessary to put transitional arrangements in place. Matters that may need to be considered will include the following:

  • What are the interim arrangements for performance of the activity (for example, arrangements between the time the novation is agreed to and the deed of novation is executed)?
  • Is there a transition plan?
  • What resources will be needed to manage the transition? Who will bear the cost?

Novations: matters to consider

  • Is the Commonwealth satisfied that the new contractor can perform the obligations under the contract and manage risk? Is the new contractor an acceptable entity to contract with in terms of due diligence process on probity issues, financial viability and capability?
  • Who will be liable for past performance or defaults before the new contractor takes over? Will the existing contractor remain liable for its performance or will the new contractor take on responsibility for any problems with the original contractor’s performance?
  • Will the novation have any impact on subcontracts or other contracts – for example, contracts with other parties working on the same site?
  • Are there any issues with the existing contractor’s performance that should be addressed and finalised before agreeing to the deed of novation? Make sure that you do not inadvertently make unintended amendments to the contract. For example, an acknowledgement of correspondence about a proposed novation which mentions a related delay in delivery may be taken to be acceptance of the delay.
  • Are there specific issues for the particular type of contract? For example, where a grant agreement deals with assets purchased with the grant, you may need to ensure those assets are being transferred to the new contractor (unless otherwise agreed).
  • Are there any existing securities or financial arrangements under the original contract that need to be replaced or updated? For example, even if both the existing and new contractor are subsidiaries of the same parent entity, an existing parent guarantee or other security may need to be amended to cover the new contractor. There may also be Personal Property Security Register entries that need to be updated.
  • At what point will the new contractor take over from the existing contractor: the date the novation deed is signed or a different date?
  • Are there any additional costs and who will bear these costs? Usually the party that is seeking the novation is required to meet the other party’s costs.

Assignments: matters to consider

  • Is the Commonwealth satisfied that the assignor can continue to perform its obligations under the contract without receiving payment?
  • Does the assignor have financial viability issues? Has the assignor sold its right to receive payment from the Commonwealth as part of a settlement of a debt with a creditor?
  • What is the underlying reason for the proposed assignment?
  • Is the proposed assignment detrimental to the Commonwealth?
  • Does the contract between the Commonwealth and the proposed assignor propose to create a confidential relationship or an enduring relationship? Does the Commonwealth want to have any engagement with the proposed assignee?

Once an agency has decided to accept a novation or assignment, the new arrangements must be recorded. The original contract may establish the form of instrument required to execute the novation or assignment. 12 In any event, the instrument may need to reflect the following.

A deed of novation will typically:

  • substitute one party for another
  • include mutual release of future obligations under the original contract between the Commonwealth and the original contractor
  • clearly specify responsibilities and liability of the original contractor and the new contractor for the pre-novation period – often supported by indemnities
  • include representations and warranties with respect to the power of the original contractor and the new contractor to enter into the deed of novation
  • include an agreement as to costs that the parties will bear in connection with the preparation, execution and completion of the novation – it is common for the other parties to pay the Commonwealth’s costs.

A deed of assignment will typically:

  • unconditionally transfer the relevant benefit to the assignee, giving the assignee complete control of that benefit, including the right to take legal action to enforce it
  • clearly specify whether there will be a redemption or reassignment in the future – for example, upon repayment of a loan
  • confirm arrangements for the ongoing performance of the contract by the assignee
  • include agreement as to costs to be borne by the parties in connection with the preparation, execution and completion of the assignment – it is common for the other parties to pay the Commonwealth’s costs.

1 See generally Olsson v Dyson (1969) 120 CLR 365, 388.

2 See Olsson v Dyson (1969) 120 CLR 365, 388.

3 See Olsson v Dyson (1969) 120 CLR 365, 388. Note that, in Leveraged Equities Ltd v Goodridge (2011) 191 FCR 71, the Full Federal Court held that it is possible for a contracting party to prospectively authorise a novation to be made by another party unilaterally. See also CSG Ltd v Fuji Xerox Australia Pty Ltd [2011] NSWCA 335,134.

4 See F ightvision Pty Ltd v Onisforou (1999) 47 NSWLR 473, 491–492; and Vickery v Woods (1952) 85 CLR 33, 345.

5 Norman v Federal Commissioner of Taxation (1963) 109 CLR 9, 26.

6 ALH Group Property Holdings Pty Ltd v Chief Commissioner of State Revenue (2012) 245 CLR 338, 346 [12].

7 This is a legislative requirement in each state: see, for example, Property Law Act 1958 (Vic) s 134.

8 See Olsson v Dyson (1969) 120 CLR 365, 388.

9 In CSG Limited v Fuji Xerox Australia Pty Ltd [2011] NSWCA 335, [133], Sackville AJA (Bathurst CJ and Campbell JA agreeing) observed that the end result in a case of novation and a case of assignment may be similar.

10 In some cases the contract may require agency approval to some of these changes or other amendments to the contract. This is different from a novation or assignment.

11 See note 3.

12 In Leveraged Equities Ltd v Goodridge (2011) 191 FCR 71, the Court stressed the importance of drafting novation and assignment clauses in the original contract clearly to avoid ambiguity when one or more parties later seek to novate or assign.

Deputy General Counsel Commercial

Senior Lawyer

The material in this briefing is provided to AGS clients for general information only and should not be relied upon for the purpose of a particular matter. Please contact AGS before any action or decision is taken on the basis of any of the material in this briefing.

ERA Legal

Tips in Enforcing Assigned Debts

Articles , Restructuring + Insolvency

Sep 23, 2016

It is common for debts to be assigned by creditors for numerous reasons.  Once a debt is assigned however it does not mean the assignee can seek to enforce the debt without facing potential difficulties.

Firstly, a question might arise as to whether the assignment is valid.  Some agreements or contracts specifically exclude the ability to assign a right arising in the agreement or contract.  For an assignment of a debt to be valid, notice must be given to the debtor in accordance with section 12 of the Conveyancing Act 1919 (NSW) .

Proving notice was given can often be a problem when a large number of debts are assigned.  Often a pro forma letter is produced and issued en masse , with no copies of the letters actually sent and addressed to each debtor being maintained.

The right of a debtor to assert an offsetting claim in defence to any step taken to enforce a debt by the assignee can also cause issues.  An assignee acquires the same rights and obligations of the assignor.  Therefore if proceedings are commenced by the assignee to enforce the debt, the defendant debtor may have an offsetting claim which arises out of the arrangement between the assignor and the debtor, to which the assignee is not a party.

Section 21 of the Civil Procedure Act 2005 (NSW)  provides for an offsetting claim to be made by way of defence even if the offsetting debt has no relationship to the debt which is the subject of the assignee’s claim.  If no debt is found to be owing by the debtor to the assignor then the assignee has essentially been assigned nothing of value.  Similar offsetting provisions apply to applications to set aside a creditor’s statutory demand for payment of debt.

When considering taking an assignment of debt, one should carefully consider the value of the assigned debt that might be recovered and ensure the notice formalities are met.

For more information please contact us , you may also be interested in our recent piece on assignment of debts in the context of bankruptcy .

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  • Corporate Debt

Debt Assignment: How They Work, Considerations and Benefits

Daniel Liberto is a journalist with over 10 years of experience working with publications such as the Financial Times, The Independent, and Investors Chronicle.

deed of assignment of debt australia

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

deed of assignment of debt australia

Katrina Ávila Munichiello is an experienced editor, writer, fact-checker, and proofreader with more than fourteen years of experience working with print and online publications.

deed of assignment of debt australia

Investopedia / Ryan Oakley

What Is Debt Assignment?

The term debt assignment refers to a transfer of debt , and all the associated rights and obligations, from a creditor to a third party. The assignment is a legal transfer to the other party, who then becomes the owner of the debt. In most cases, a debt assignment is issued to a debt collector who then assumes responsibility to collect the debt.

Key Takeaways

  • Debt assignment is a transfer of debt, and all the associated rights and obligations, from a creditor to a third party (often a debt collector).
  • The company assigning the debt may do so to improve its liquidity and/or to reduce its risk exposure.
  • The debtor must be notified when a debt is assigned so they know who to make payments to and where to send them.
  • Third-party debt collectors are subject to the Fair Debt Collection Practices Act (FDCPA), a federal law overseen by the Federal Trade Commission (FTC).

How Debt Assignments Work

When a creditor lends an individual or business money, it does so with the confidence that the capital it lends out—as well as the interest payments charged for the privilege—is repaid in a timely fashion. The lender , or the extender of credit , will wait to recoup all the money owed according to the conditions and timeframe laid out in the contract.

In certain circumstances, the lender may decide it no longer wants to be responsible for servicing the loan and opt to sell the debt to a third party instead. Should that happen, a Notice of Assignment (NOA) is sent out to the debtor , the recipient of the loan, informing them that somebody else is now responsible for collecting any outstanding amount. This is referred to as a debt assignment.

The debtor must be notified when a debt is assigned to a third party so that they know who to make payments to and where to send them. If the debtor sends payments to the old creditor after the debt has been assigned, it is likely that the payments will not be accepted. This could cause the debtor to unintentionally default.

When a debtor receives such a notice, it's also generally a good idea for them to verify that the new creditor has recorded the correct total balance and monthly payment for the debt owed. In some cases, the new owner of the debt might even want to propose changes to the original terms of the loan. Should this path be pursued, the creditor is obligated to immediately notify the debtor and give them adequate time to respond.

The debtor still maintains the same legal rights and protections held with the original creditor after a debt assignment.

Special Considerations

Third-party debt collectors are subject to the Fair Debt Collection Practices Act (FDCPA). The FDCPA, a federal law overseen by the Federal Trade Commission (FTC), restricts the means and methods by which third-party debt collectors can contact debtors, the time of day they can make contact, and the number of times they are allowed to call debtors.

If the FDCPA is violated, a debtor may be able to file suit against the debt collection company and the individual debt collector for damages and attorney fees within one year. The terms of the FDCPA are available for review on the FTC's website .

Benefits of Debt Assignment

There are several reasons why a creditor may decide to assign its debt to someone else. This option is often exercised to improve liquidity  and/or to reduce risk exposure. A lender may be urgently in need of a quick injection of capital. Alternatively, it might have accumulated lots of high-risk loans and be wary that many of them could default . In cases like these, creditors may be willing to get rid of them swiftly for pennies on the dollar if it means improving their financial outlook and appeasing worried investors. At other times, the creditor may decide the debt is too old to waste its resources on collections, or selling or assigning it to a third party to pick up the collection activity. In these instances, a company would not assign their debt to a third party.

Criticism of Debt Assignment

The process of assigning debt has drawn a fair bit of criticism, especially over the past few decades. Debt buyers have been accused of engaging in all kinds of unethical practices to get paid, including issuing threats and regularly harassing debtors. In some cases, they have also been charged with chasing up debts that have already been settled.

Federal Trade Commission. " Fair Debt Collection Practices Act ." Accessed June 29, 2021.

Federal Trade Commission. " Debt Collection FAQs ." Accessed June 29, 2021.

deed of assignment of debt australia

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IMAGES

  1. Free Debt Assignment and Assumption Agreement

    deed of assignment of debt australia

  2. Deeds of Assignment of a Debt

    deed of assignment of debt australia

  3. Assignment of Debt Agreement

    deed of assignment of debt australia

  4. Deeds of Assignment of a Debt

    deed of assignment of debt australia

  5. New York Notice of Assignment of Contract for Deed

    deed of assignment of debt australia

  6. Deed of Acknowledgment of Debt

    deed of assignment of debt australia

COMMENTS

  1. What is an Assignment of Debt?

    An assignment of debt, in simple terms, is an agreement that transfers a debt owed to one entity, to another. A creditor does not need the consent of the debtor to assign a debt. Once a debt is properly assigned, all rights and responsibilities of the original creditor (the assignor) transfer to the new owner (the assignee).

  2. - Assignment of Debt document templates

    Use Lawlive's Deeds of Assignment of Debt (Loans) to assign a debt as between companies and individuals or between each. The deeds assign rights and accordingly it is important to consider the requirements to assign a debt and the risks of doing so.

  3. The Enforcement of Assigned Debts

    Under the Property Law Act 1974 (Qld), specifically in Section 199, provisions are made for the assignment of debt at law. This allows for the transfer of debt ownership from the original credit provider (the assignor) to the new owner (the assignee).

  4. Deed of Assignment of Debt Template: Individual to Company

    This Deed of Assignment of Debt is suitable for an assignment of a debt where the Assignor is an individual and the Assignee is a company. The Debtor may be either a company or an individual. This assignment contemplates that the debt is immediately due and payable.

  5. Understanding Deed of Assignment

    A Deed of Assignment is a legally binding document that allows one party, known as the assignor (the party relinquishing the rights, benefits, or obligations), to transfer specific rights, benefits, or obligations to another party, referred to as the assignee (the party receiving the assigned rights, benefits, or obligations).

  6. Assignment of debts, statutory demands and offsetting claims

    18 July 2016 Assignment of debts, statutory demands and offsetting claims It is not uncommon for a creditor (assignor) to transfer their right to receive payment of a debt (assignment) to a third party (assignee). The assignee will then seek payment from the debtor.

  7. Deed of assignment of debt

    Deed of assignment of debt $71.00 Add to Cart This document is a deed of assignment of debt. Assignment An agreement that transfers one party's rights in a contract but not its obligation or liabilities to a third party is called an assignment.

  8. Passing your assignments: Getting straight A's as an assignee of debt

    Rural entered into an asset sale agreement and deed of assignment (the Deed) with Equuscorp Pty Limited (the Appellant) assigning the loan agreements and amounts owing under them. The Deed was expressed to effect an "absolute assignment" of the debt and "all legal and other remedies" (emphasis added) under the loan agreements.

  9. Essential Legal Requirements for Deed of Assignment

    April 19, 2023 Download Article If you're involved in the transfer of contractual rights and obligations, a deed of assignment can be an essential legal document. It provides a framework for transferring your rights or taking over someone else's. But creating a valid deed of assignment involves more than just filling out a form.

  10. Deed of Assignment

    Lawpath Legal Documents Deed of Assignment Document Overview An assignment involves the transferal of some or all of the contractual rights or benefits by one party (the assignor) to a third party (the assignee).

  11. Debt Assignment in Queensland

    A debt assignment is an agreement where a debt, along with all its associated legal rights and responsibilities, is transferred from the original creditor to a third-party purchaser. Once verified, the third party, now termed the assignee, becomes the official owner of the debt and has the right to collect it.

  12. CONVEYANCING ACT 1919

    12 Assignments of debts and choses in action. Any absolute assignment by writing under the hand of the assignor (not purporting to be by way of charge only) of any debt or other legal chose in action, of which express notice in writing has been given to the debtor, trustee, or other person from whom the assignor would have been entitled to ...

  13. Assigning the right to sue

    In NSW, assignments of debts and choses in action are governed by section 12 of the Conveyancing Act. This provides that there is four criteria that must be met in order to effect a legal assignment: It must be an absolute assignment (so you cannot legally assign part of something, e.g. half a bank account if it was a debt); It must be in writing;

  14. Is Your Notice Assignment of Debt Valid? May 25, 2020

    The assignee must issue a notice of assignment of debt (" Notice ") to the debtor at the debtors last known residential address. This is where the confusion and issues around the service of the Notice can occur by the debtor. Generally, a bank will assign the debt to a collection company after years of attempting collection/locating debtor.

  15. Assignment of Debt

    An assignment of debt is an agreement that transfers a debt, and all of the legal rights and obligations attached to it, from the creditor to a third party. The third party may be an individual or a company, such as a debt collection agency. Application for small business people.

  16. Legal briefing

    Assignment. A deed of assignment will typically: unconditionally transfer the relevant benefit to the assignee, giving the assignee complete control of that benefit, including the right to take legal action to enforce it; clearly specify whether there will be a redemption or reassignment in the future - for example, upon repayment of a loan

  17. Deed of Assignment of Debt Template: Company to Company

    1. Assignment of debt 2. Covenant for further assignment 3. Notice in writing to the debtor 4. Stamp duty and registration fees 5. No warranty as to payment 6. Legal advice 7. Consideration Please note: this document is not suitable where the Assignor or the Assignee is an individual - see our separate templates.

  18. Tips in Enforcing Assigned Debts

    For an assignment of a debt to be valid, notice must be given to the debtor in accordance with section 12 of the Conveyancing Act 1919 (NSW). Proving notice was given can often be a problem when a large number of debts are assigned. Often a pro forma letter is produced and issued en masse, with no copies of the letters actually sent and ...

  19. What Is A Deed of Assignment, Anyway?

    A Deed of Assignment is a legal document that transfers or assigns the legal rights and obligations to another party. And it varies depending on your situation. For example, an assignment could work for simple things like intellectual property. When a graphic designer creates a logo for you, you might want to make sure that logo is owned by you.

  20. Assignment (Australia)

    An Assignment may be used to transfer all or part of one's interest or rights in personal property to another person. LawDepot's free Assignment template can be completed in minutes by going through the guided questionnaire. Available in all states, as well as the Australian Capital Territory (ACT) and Northern Territory (NT).

  21. Deed of Assignment of Debt Template: Individual to Individual

    Overview This Deed of Assignment of Debt is suitable for an assignment of a debt where the Assignor is an individual and the Assignee is an individual. The Debtor may be either a company or an individual. This assignment contemplates that the debt is immediately due and payable.

  22. Understanding Deed of Assignment

    A Deed of Assignment is a legally binding document that allows one party, known as the assignor (the party relinquishing the rights, benefits, or obligations), to transfer specific rights,...

  23. Debt Assignment: How They Work, Considerations and Benefits

    Debt Assignment: A transfer of debt, and all the rights and obligations associated with it, from a creditor to a third party . Debt assignment may occur with both individual debts and business ...