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A Debt Assignment and Assumption Agreement is a document by which a party's debt is transferred or assigned to another party. The debtor is the party that transfers its debt to an assignee, while the creditor is the party that the debtor owes money.
In a Loan Agreement or Promissory Note, the main parties are the creditor (or the lender), the debtor (or the borrower), and the guarantor (or guarantee, if applicable). Here, the debtor is required to repay the loan under certain terms and conditions. However, in some situations where the debtor may be unable to repay the loan or debt, the creditor may allow the debtor to assign the debt to another party (known as the assignee). Therefore, this document is used by a debtor to assign the entire or a portion of their debt to another party, who becomes liable to pay the assigned debts.
By signing this Debt Assignment, the assignee assumes the liability of the debt assigned to them. For example, the assignee becomes liable to repay the debt sum, and the debtor is released from liability, except the debtor is jointly liable.
Note that this document is different from the Guaranty Agreement, where a party agrees to repay a debt in the event of the debtor's default.
How to use this document
This is a simple and short document that requires the names and contact details of the parties, the debt sum, interest rate (if any), the terms of repayment, and other terms of the agreement.
After completing the document, the user should print the document and all the copies of the document should be signed by all the parties.
If either of the parties is a company, either two directors or one director and one company secretary should sign the document, and the common seal of the company may be affixed on the document. If either of the parties is any other organization other than a company, an officer of the organization should sign the document.
After signing the document, the parties should keep at least one signed copy of the document for their record.
The general rules of contract apply to this document.
How to modify the template
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