Assignment under a loan agreement with an individual, as well as with a legal one, represents a concession on the part of a banking organization of a requirement to repay a debt to a third party. In most cases, collectors act as third parties, and sometimes another bank, but this option happens much less often. In speech use, this type of operation can be called a sale of debt, which in fact occurs when for a certain percentage of the total amount of debt it is simply transferred to another person.
Does the borrower consent to transfer the debt?
Assignment under a loan agreement to third parties who do not have permission to carry out banking activities (such as collectors, for example), necessarily requires the consent of the borrower. However, today there are a lot of cases when banks and other organizations licensed to conduct banking operations circumvent this rule, providing in advance in their credit agreements for their own right to transfer to third parties claims for fulfilling monetary obligations.
Cases of selling debt by banks
When the borrower signs an assignment loan agreement, for the bank this is an automatic consent to the implementation of this agreement at the discretion of the financial institution. In most cases, in only three cases, banks can sell credit debt:
- In cases where, according to banking standards and certain criteria, debt is recognized as irrevocable or problematic. With such a development of events, it is more profitable for the bank to cede this claim and receive at least minimal compensation for damage incurred by it than to engage in independently implementing all necessary measures to collect the debt or to maintain it.
- In some cases, when the principal amount of the debt has already been paid off or even some profit has already been made in the form of all the interest specified in the agreement, certain difficulties arose in repaying the loan and, consequently, in that the bank cannot receive additional interest on this type of operation.
- In cases where a bank has financial difficulties or the bank has planned liquidation or bankruptcy, as a result of which it tries to find funds as soon as possible in order to eliminate such problems, pay off creditors by selling off receivables.
This procedure for assignment under the loan agreement "VTB 24", like most other banks, adheres.
Loan arrears, as a rule, are sold in portfolios, and banks at the same time on an ongoing basis cooperate with special trusted organizations that provide them with interaction.
What does cession entail for the borrower?
If we consider the assignment under a loan agreement from the side of the consequences for the borrower, then when a bank enters into agreements of this kind, this almost does not change anything for him. Only the creditor is changing, and this, as it is not difficult to guess, is not a very significant circumstance. The amount of debt, as well as the procedure for the implementation of all necessary obligations remain unchanged only if the borrower and the lender do not amend the agreement on the terms of repayment of the debt.
Assignment under a loan agreement with a legal entity, as well as with an individual, may not be a negative experience for a borrower, because a new lender acquires a debt at a minimum cost that is disproportionately smaller in relation to its volume.In connection with this factor, the return of their money already spent and getting at least the minimum profit is already the best option for the newly arrived party to the transaction.
A new lender is not always bad
There are situations when a borrower buys back his own debt and can even conclude a very profitable deal for himself, as a result giving the lender a much smaller amount of money, which is the amount of debt itself. It often happens that with a new lender it is much easier to agree on how to restructure this debt or, for example, write off some part of the accumulated debt, or choose another, more loyal method of paying it off. In this case, the main role is played by the fact that debt can be redeemed at the lowest cost, which is sometimes several times less than the debt itself.
Negative effects of cession for the borrower
The peculiarity of the assignment under the loan agreement is that the debt can be resold several times, and in order to track such a resale chain, as well as to understand who should ultimately receive it, sometimes it takes a lot of effort. Nevertheless, the borrower should not monitor it, and even if he did not receive notices of the sale or resale of this debt, he has the right to pay the lender, whose existence he knows for sure. All possible risks and difficulties with this development of events fall on the shoulders of the lender or lenders, if there are several of them, which did not send the borrower all the necessary notifications.
However, in this case, there remains a great likelihood that the final lender will begin to send his claims to the borrower, and he will have to feel the pressure or take all necessary measures in order to resolve the situation peacefully. The new creditor has the right to unilaterally affect the change in the conditions for the performance of the obligation. For example, he has the right to demand the repayment of any of his costs and expenses, in excess of debt, or to repay the debt immediately. Judicial practice says of a cession under a loan agreement that this is not provided by law, however, this proceedings will already be considered in court, or there will be another option - to wait until the creditor independently appeals to the court to recover the debt.
Special cases of negative effects of cession
In the most difficult cases, the debt is repeatedly bought up, emerges as an asset in various illegal schemes, for example, accounts receivable, and ultimately either the private entrepreneur or the company, whose actions will be extremely difficult to predict, turns out to be a creditor. In these cases, it becomes clear that it is impossible to resolve the situation without the intervention of law enforcement agencies, just as it is impossible to make claims against the borrower, namely overpriced claims, in excess of debt. On the other hand, one cannot live calmly under such pressure from creditors, as well as during trials.
In cases where the assignment agreement infringes on the rights and legitimate interests of the borrower, he has the right to use legal methods for his own protection. Thus, as a result, the judicial authority deals with the problem in the manner prescribed by law.
Can a borrower defend his rights?
The borrower is not a party to the assignment, he has a passive position, so he can not put forward his requirements for termination of the contract. Nevertheless, there are certain circumstances due to which the debtor has the right to demand that the cession under the loan agreement be invalidated, which subsequently leads to the fact that it is simply canceled with the return of this relationship to its original condition.
The tasks that the borrower must solve for himself
You need to know that the invalidity, or cancellation, of an assignment for the borrower is a fact of change only for the lender, so it makes sense to use it only in certain cases, in particular, when he is faced with tasks such as:
- To return the situation to the development of events that took place at the very beginning, before the conclusion of the contract.
- To get rid of inadequately overestimated claims of creditors if they do not meet the previous conditions for the fulfillment of obligations or significantly increase the amount of debt.
- Get rid of a new lender who overstates the requirements, or changes them not in favor of the borrower, thereby violating his rights and legitimate interests.
- Get rid of all kinds of claims if, in fact, debt no longer exists.
Cancellation of an assignment can in no way affect the terms of the loan agreement. And if you need to get rid of the obligation, then invalidating the assignment will not help in solving this problem.
Cancellation of an assignment agreement under a loan agreement
The debtor has the right to file a lawsuit in court to declare the cession invalid only in the following cases:
- The loan agreement did not spell a ban on the assignment of claims.
- Upon assignment of the claim to any organization that does not have a banking license, the debtor did not give his consent.
The borrower has the right to demand recognition of the assignment as invalid by filing a counterclaim, in cases where the creditor has filed a lawsuit against him. And already in this case he has a lot of reasons and grounds for making such a demand. In most cases, it is after filing counterclaims that the court satisfies the requirements for the recognition of the invalidity of the assignments, and this, in turn, serves as a reason to put forward another requirement for the recognition of the claim declared by the creditor, not subject to satisfaction, and in this case the main advantage Of course, on the side of the borrower.
Finally
So, a cession under a loan agreement is an agreement that provides for the alienation of rights to debt to third parties on a legal basis. To put it simply, this is a type of legal transaction that determines the procedure for transferring any obligation without the consent of the debtor. As for the accounting staff, the reflection of the assignment under the loan agreement in the accounting of the assignor is reflected through the sale of other assets.