Head of practice
Attorney. Specialist in commercial and labor law. Over 16 years of experience in legal support of businesses - debt recovery, contract enforcement, recovery of damages, commercial property and lease disputes.
Debt transfer agreement
What is debt transfer?
In modern credit legal relations, cases of debtor replacement, also known as debt transfer, are quite common. This procedure should be understood as the change of the person who has a debt obligation to the creditor to another person who becomes responsible for repaying the debt. The features of this are:
- firstly, the creditor's mandatory consent to the replacement, since this action primarily concerns the procedure for repayment and interaction with the new party;
- secondly, it must be documented (a civil law contract is concluded in writing);
- thirdly, the scope of the rights and obligations of the new debtor in comparison with the previous one remains unchanged. fourthly, the unconditional termination of the guarantee and pledge established by a third party (on the provision of a loan, credit, etc.), if the guarantor/pledgee does not agree to be responsible for the obligations of the new debtor.
There is a popular alternative to the debt transfer procedure, which is the execution of an assignment of the right of claim. However, as a rule, preference is given to the transfer itself.
A debt transfer agreement: essential terms and features
A debt transfer agreement is an agreement under which the debtor transfers his debt to another person (the new debtor), who, with the consent of the creditor, must fulfill it. Like any other civil law agreement, it is regulated by the provisions of the current Civil Code of Ukraine.
The essential conditions of such an agreement are its:
- subject: a clear definition of the debt that must be returned (amount, type of obligation under a previously concluded agreement, grounds for its occurrence, etc.);
- parties (counterparties): the original debtor (the person transferring his debt), the new debtor (the person assuming the obligation), the creditor (the person to whom the debt exists);
- form: always concluded in writing, and in some cases a notarial certificate may be required;
- conditions (relating to the performance of the debt obligation): the term for its performance by the new debtor, the procedure for performing the obligation (cash, non-cash payment, etc.), the liability of the parties for failure to perform or improper performance of the relevant obligations.
It is important to emphasize: the conclusion of an agreement on the replacement of the debtor is possible only in relation to a real existing debt. In other words, such an agreement can be concluded if there is a previous agreement on the repayment of the debt, and cannot be concluded in relation to a debt that is likely to arise in the future. More detailed information on this issue can be obtained by consulting a specialized lawyer.
The price of developing a debt transfer agreement by a lawyer
Experienced lawyers understand how important it is to clearly formulate the essential terms of the agreement, which will ensure both the rights of the debtor and the legitimate interests of the creditor itself. Therefore, specialists from the Law Firm “Prikhodko and Partners” offer a high-quality complex of legal assistance, which includes receiving comprehensive advice, legal analysis of the original agreement, and development of a draft debt transfer agreement.
We recommend contacting specialists to develop an individual contract, since, unlike a template, it takes into account specific circumstances, is adapted to your situation, complies with the legislation (the template may have been drawn up at the time of the adoption of old provisions of civil and other special legislation), and reduces the risks of disputes.
The price of developing such a contract by our lawyer depends on many factors, which, in turn, determine the complexity and scope of work:
- firstly, the number of debtors. In this case, there is a need to devote more time to developing the agreement itself, having conducted the necessary negotiations with the creditor and agreed on all important nuances;
- secondly, the nature of the debt obligation itself. The debt may arise for various reasons (loan agreement, provision of services, etc.), which may affect the specifics of the debt transfer agreement and require the lawyer to comprehensively study the primary agreement between the parties;
- thirdly, the specifics of the request of the client himself, who applies for such development. A client who contacts our lawyer may want, for example, that the service be provided to him in the shortest possible time.
- other factors that the lawyer discusses with the client as part of an introductory legal consultation.
Thus, debt transfer is the replacement of the debtor in existing debt relations, which requires the consent of the creditor. The key aspects of this civil law agreement are compliance with the mandatory written form, taking into account the rights and obligations of all its parties, the existence of debt at the time of its conclusion. Before concluding a debt transfer agreement, it is necessary to clearly assess the financial capabilities of the new debtor, study the main terms of the agreement and seek professional legal assistance to avoid unnecessary risks and disputes with the creditor.
Contacting the lawyers of the “Prikhodko & Partners” Law Firm to develop an individual debt transfer agreement is a guarantee of your legal security and financial peace of mind. To find out the cost of legal support, please fill out the form below.
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