Transfer of Obligations Transfer and Examples

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Jonah Lester
Transfer of Obligations Transfer and Examples

The transfer of obligations refers to transferring to another person the position as creditor or debtor, following the will of the transferor or transferor or by an act of its own to which the legislation attributes that substitution capacity. An example of the latter is when, upon death, the rights are transferred to the heir.

Obligations can be transferred, either by acts carried out between living (contracts, agreements or legislation) or by death (bequests or inheritances), without modifying the law itself. All rights have the power to be assigned, except for rights that are outside the patrimony and those prohibited by law..

It is possible to transfer rights and not things, since if they would not be considered sales, exchanges or donations. The transferability of the obligations is ratified by article 1112 of the Spanish Civil Code: "All rights acquired by virtue of an obligation are transferable subject to the law, unless otherwise agreed".

Article index

  • 1 Forms of transfer of obligations
    • 1.1 Transfer of rights
    • 1.2 Assumption of debts
  • 2 Examples
    • 2.1 Assignment of debt
    • 2.2 Assumption of debts
  • 3 References

Forms of transfer of obligations

There are different ways of transmitting obligations: the transfer of rights, the transfer of debts and subrogation.

In all cases there is a change in nature, as well as in the existing legal relationship between the parties. Despite this, the same legal relationship remains, alluding to the fact that there is a subjective change regarding the active or passive subject of the transmitted obligation.

Cession of rights

It is an agreement by which the assignor (creditor) voluntarily transfers his rights against the assigned (debtor) to a third party who is the assignee. The transferee is placed by this agreement in the place of the transferor as creditor..

Normally, any right can be assigned except those that the applicable legislation specifically indicates that their assignment is prohibited; for example, alimony.

Sometimes, the origin of the impossibility in the transfer of some rights has as its origin the previous agreements established between the creditor and the debtor, who choose not to allow any transfer of rights. Of course, it has to be reflected in a document with legal validity.

For example, the transfer of rights of the tenant is usually expressly limited in rental contracts.

Characteristics

- The debtor's consent is not necessary.

-Transmission agreement with economic exchange or not.

- The legal relationship remains unchanged.

-Modification of the active subject; this is replaced by another.

It is essential to emphasize that, although the right is assigned, the legal relationship that gave it object remains unaltered, as well as all its obligations and rights..

On the terms within the assignment and the duration of responsibility, article 1530 says the following:

“When the transferor in good faith has been made responsible for the solvency of the debtor, and the contracting parties have not stipulated anything about the duration of the responsibility, this will last only one year, counted from the assignment of the credit, if the term has already expired..

If the credit is payable in a term or term not yet expired, the responsibility will cease one year after expiration..

If the credit consisted of a perpetual income, the responsibility will expire after ten years, counted from the date of the assignment ".

Although it does not have a specific regulation in the Civil Code, there are several articles that refer to the transfer of the right: 1112, 1198, 1526, 1527, 1528, 1529 and 1530.

Assumption of debts

It is an agreement between the debtor and the person who assumes the debt, who would be the assassin. According to this contract, the assignee agrees to be responsible for the obligation he had of the debtor..

In the same way as the transfer of rights, it is a way of transmitting obligations. However, in this case the taxpayer is changed, differing from the figure of novation since the legal bond between the parties is not terminated.

Characteristics

-Transmission agreement.

-Substitution of taxpayer.

-The legal relationship remains unchanged with assumption of debt.

-The creditor must give their tacit consent.

The one who assumes the debt does so under the same conditions as the original debtor. On the other hand, by making the obligation his own, the original debtor is released.

It is necessary for the creditor to accept that the debt is assigned to a third party. This acceptance can be expressed tacitly, for example, by accepting payments from the business owner..

Examples

Assignment of debt

Mr. García goes to the bank with the objective of requesting a loan, establishes a promissory note as collateral for the loan, this is a requirement of the bank after examining Mr. Garcia's income, payroll and properties. The loan must be paid in 24 equal installments comprising the principal and interest.

Due to liquidity problems, months later the bank sells the remainder of the loan that Mr. García has not yet paid to another bank..

Through this assignment, Mr. García remains a debtor although his creditor has changed, which is now this second bank that has bought the debt.

Assumption of debts

Manuel and María are a young couple who are getting married and decide to buy their first home together. To do this, they go to the bank to request a loan for a period of 25 years and a monthly fee of 1200 euros to be paid periodically.

Two years later, María becomes pregnant and is fired from work, at the same time that Manuel's company carries out an ERE (Employment Regulation File). With both unemployed it is impossible to meet the mortgage payments.

Faced with this problem, Manuel's parents decide to assume the debt themselves and make the remaining mortgage payments, freeing Manuel and María from the debt with the bank, putting themselves in their place..

References

  1. Antonio Gálvez Criado. (2007) The assumption of debt in civil law. Tirant.com
  2. Iberley (2016). Transfer of obligations: Assignment of credits and assumption of debt. Iberley.es
  3. Lawyers Maule. Cession of rights. Abogadosentalca.com
  4. Legal encyclopedia. Transfer of the obligation. Legal Encyclopedia.com
  5. Bruguera lawyers (20014). The debt assumption contract. brugueraabogados.com

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