In the case of an assignment , a creditor transfers the claim to a contracting party, who then becomes the creditor. The assignment is a disposal transaction based on a commitment transaction. This can be a donation, a sales contract or other contractual arrangements. The original creditor is also called Cedar, the new one referred to as the assignee. Once the assignment has been completed, the cedant loses the right to seek the debtor’s debt. This right then has the assignee. According to the law, the so-called accessory securities ordered for the claim, such as liens, mortgages or guarantees, also go to the assignee. Basically every claim can be assigned, but there are exceptions. These include highly personal claims such as leave entitlement, pension or maintenance claims, claims that relate to a special trust relationship, claims in which an assignment, by agreement with the debtor, has been excluded, unrecoverable claims and legally prohibited claims assignment as under §§ 473, 717 Civil Code.
The assignment agreement is free of form and is valid even if the claim relates to a contract that is formally required. It is not necessary for the debtor to participate or receive any information. This is a silent cession. An exception is declared under § 42 (2) of the Tax Code.
An assignment may also take the form of a sale of the claim. As a result, the cedant can become liquid again in the short term. An assignment can also be used as a form of credit insurance, for example, when disbursement claims of corporations, life insurance claims or salary claims are assigned to a bank. If this form of assignment is chosen, the bank will be paid the insurance claims as soon as the customer is no longer solvent.
If it is an open cession, the debtor is informed about the upcoming assignment. The payments to be made are then only to be made to the assignee. Usually the open assignment is especially with life insurance.
There is also the assignment of future claims, such as the global assignment or the extended retention of title. However, it is a prerequisite that the claim is exactly designated or at least to be determined.
If an assignment is agreed, an assignment agreement is signed, which both creditors sign. There are no formal requirements, but they must be in writing.