What is the difference between an assignment of receivables and a trust assignment of receivables?

Considerations about the differences in the assignment of claims and the fiduciary transfer of claims should begin with the approximation of the meaning of the above-mentioned terms. We will also try to answer the question of what is the difference between an assignment of receivables and a trust assignment of receivables.

Assignment of receivables

The assignment of receivables is an agreement referred to in the Civil Code and may be a paid or free contract. The assignment of receivables should be understood as transferring the rights of the current creditor (assignor) to a third party (buyer of the receivables, known as the assignee). In other words, it is a creditor exchange. Such a conversion takes place by means of an agreement that transfers the claim to a third party, i.e. assignment of receivables (transfer).

The legislator does not formulate an obligation to notify or obtain the consent of the debtor to make the assignment, however, if the uninformed debtor performs his performance for the assignor, it relieves him of the debt. As a rule, the form of the transfer of receivables remains any. However, if the claims were confirmed in writing, the transfer should also be made in the same form.

The reservation resulting from Art. 788 of the Code of Civil Procedure - namely, in the event of a desire to obtain an enforcement clause for the acquirer of a claim certified by an enforceable title, you must prove your right to this claim, confirmed by an official or private document with an officially certified signature.

Trust transfer

A trust transfer is one of the types of assignment of receivables. It is made on the basis of a contract that has not been directly regulated in the provisions of civil law (it is an unnamed contract).

What is the difference between an assignment of receivables and a trust assignment of receivables?

To illustrate the differences between the above-mentioned issues, let's use the following diagrams:

Assignment of receivables:

Cedent → has a claim against the → debtor

Assignee → unconditionally sells receivables to a → assignee

Assignee → payment for a claim for a → assignor

Trust transfer:

Cedent → has a claim against the → debtor

Assignor → makes a conditional sale of receivables to a → assignee

Assignee → settles the claim after its recovery from the debtor → assignor

Assignee → after unsuccessful recovery from the debtor - debt return → assignor

To sum up, in fact, an escrow transfer is nothing else than a debt collection order, with the transfer of the rights of the creditor onto the person carrying out the recovery.