Transfer of receivables, also popularly known as assignment, is a well-known and well-described institution of civil law (Article 509 of the Civil Code et seq.). Equally recognizable is a subtype of this agreement involving a fiduciary transfer of claims with a concomitant obligation on the assignee to carry out the collection process, of course, for an appropriate fee, usually defined as a commission representing a certain percentage of the amount enforced.
Recently, we were asked by one of our clients to create an escrow agreement for the transfer of a large debt package containing outstanding loans taken out by individuals living in Spain.
The client’s intention was to word the agreement in such a way that the receivables, despite the assignment to a third party, would continue to appear on the books of the seller. This goal was achieved thanks to the relevant provisions of the contract, which left no doubt that despite the transfer of claims, the rights still remained the property of the client in an economic sense and could return to the client’s estate at a convenient time.
Although the agreement was concluded under Polish law, our law firm also had to take into account Spanish regulations regarding the effective transfer of claims and the form of such transfer.
All this is done so that the recovery process can take place smoothly.
It is worth mentioning at this point an interesting institution of Spanish law, which is the possibility for the debtor to buy back the assigned claim if the assignment has occurred in the course of legal proceedings. The redemption price is then the selling price of the claim.
Thanks to the cooperation with a Spanish law firm and our team’s experience in handling unusual and complex legal assignments, the task was successfully completed.
